Greece Wins 2.5 Billion-Euro Aid Loan, Buying Time in Crisis

Greece won the release of a 2.5 billion-euro ($3.3 billion) loan installment to tide it through the coming weeks, as European governments put off debate over Greek debt relief until after Germany’s election in September.

Euro-area governments approved the payment today on a conference call of senior finance officials, European Commission spokesman Simon O’Connor said, after Greece yesterday took steps to pare public-sector payrolls, meeting the last of 22 conditions set by creditors.

“As a result, with the proviso that the national approval procedures are completed, which we expect to happen on Monday, the disbursement can take place of 2.5 billion euros from the EFSF and 1.5 billion euros of income generated to national central banks from the securities markets program,” O’Connor told reporters in Brussels today.

A German parliament committee votes on July 29 to give the go-ahead for Germany’s contribution.

After the July payments, Greece is scheduled to receive an additional 500 million euros from the European Financial Stability Facility and to recoup the same amount from profits made by euro-area central banks on Greek bonds in their portfolios. These payments, set for October, are contingent upon Greece’s fulfillment of additional requirements.

Greece is also scheduled to receive 1.8 billion euros from the International Monetary Fund. The IMF meets July 29 to discuss its portion, German Deputy Finance Minister Steffen Kampeter said this week.

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