Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Euro Finance Chiefs Give Political Backing to Greek Plan

March 14 (Bloomberg) -- Euro-area member states gave formal approval to a second Greek bailout program, freeing a first installment of 39.4 billion euros ($51.5 billion) of aid.

The European Financial Stability Facility, the euro region’s temporary rescue fund, has been authorized to disburse the first payment in several tranches, Luxembourg Prime Minister Jean-Claude Juncker, who leads the group of 17 euro-area finance ministers, said in a statement today.

“This second program constitutes a unique opportunity for Greece that should not be missed,” Juncker said. “The Greek authorities should therefore continue demonstrating strong commitment and to keep up the implementation momentum by rigorously pursuing the adjustment effort in the areas of fiscal consolidation, structural reforms and privatization, strictly in line with the new program.”

The 130 billion-euro package received political approval earlier this week from the euro ministers at a meeting in Brussels. The International Monetary Fund’s board is set to vote on its participation tomorrow in Washington. IMF Managing Director Christine Lagarde has proposed a 28 billion-euro contribution, the IMF said on March 12.

The agreement caps months of grueling negotiations between Greece, the IMF and euro-area authorities over the successor to an initial 2010 bailout that failed to halt the debt crisis. To win the new aid package, Greece had to sign on to deep budget cuts and complete the world’s largest-ever sovereign-debt restructuring.

`Fundamental Obligations'

“The situation has changed for Greece,” Finance Minister Evangelos Venizelos said after the ministerial meeting. Greece has “fundamental obligations” and must continue to implement its austerity program, he said, adding that elections in Greece won’t interrupt the pace of budget measures.

Greece is now in line to receive more than 100 billion euros in the next three years, starting with payments of 5.9 billion euros in March, 3.3 billion euros in April and 5.3 billion euros in May, according to EFSF Chief Executive Officer Klaus Regling.

The EFSF expects to disburse 48 billion euros on a non-cash basis for Greece’s bank-recapitalization efforts. Venizelos said he expects his nation to receive a 25 billion-euro first tranche of bank-sector funds soon.

The rest of the funds headed for Greece will be raised from financial markets, Regling said.

To contact the reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net; James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.