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Greece to Get Delayed Aid Payout This Month, Stournaras Says

Greek Finance Minister Yannis Stournaras predicted that Greece would win the release this month of a 1 billion-euro ($1.4 billion) delayed aid payment after reaching an accord on restructuring the defense industry.

Stournaras said a meeting he had today with European Union Competition Commissioner Joaquin Almunia produced a deal to split Hellenic Defense Systems SA into commercial and military units. The commercial business will be liquidated and the military operations will have a year to show viability, including through exports, he and other Greek officials said.

This, along with a plan to liquidate Hellenic Vehicle Industry SA, is the final “milestone” that the Greek government must meet to unlock 1 billion euros remaining from a 5 billion-euro payout approved in principle by the euro area in July. The matter has involved Almunia because it concerns EU rules limiting state aid to companies.

“I am satisfied,” Stournaras told reporters in Brussels after he met Almunia and attended a separate gathering of euro-area finance ministers. “The goal is to have the sum from July disbursed by the end of the year.”

In addition to seeking the release of the remaining aid sum from July, the Greek government is trying to strike an agreement with the euro area and the International Monetary Fund to qualify for payouts of emergency funds in 2014.

The government is resisting any extra fiscal tightening as it clings to a four-seat majority in parliament and the economy contracts for a sixth year. Since early 2010, Greece has received two international rescues totaling 240 billion euros in return for bringing public spending under control.

In late October, the international creditors held that Greece’s 2014 budget hole may be around 2 billion euros, while Athens asserted the fiscal gap was no more than a quarter of that sum.

“Technical discussions” between the creditors and Greek government will resume this week in Athens and a “full” negotiating team intends to return to the Greek capital in January with the goal of reaching an agreement, according to the European Commission, the EU’s executive arm. It represents Greece’s international creditors along with the European Central Bank and the IMF.

Stournaras said today that he would meet the heads of the negotiating teams of the commission, the ECB and the IMF on Dec. 11 in Athens.

“We will work on a 24-hour basis to complete as many subjects as possible,” he said. “If we don’t finish, we’ll come in January with an order to finish during the first 15 days.”

To contact the editor responsible for this story: Jonathan Stearns at jstearns2@bloomberg.net

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