Greece Gives Order to Pay $3.6 Billion in ECB-Held Bonds Due Thursday

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Greece Begins to Repay Debts as Bailout Comes its way...

Greece gave the order for the repayment of about 3.2 billion euros ($3.6 billion) of bonds held by the European Central Bank, a Finance Ministry official said, asking not to be identified in line with policy.

Euro-area finance ministers signed off on the country’s third bailout late Wednesday, paving the way for the nation to pay its bills and begin to rebuild its economy. The approval meant funds could be disbursed from the program in time for Greece to be able to make the ECB repayment.

The European Stability Mechanism approved the first transfer of about 13 billion euros out of the 86 billion-euro program, the Brussels-based crisis fund said in statement. Another 10 billion euros will go into a segregated ESM account that is available for bank recapitalization.

Greek stocks and bonds fell on Thursday, with the yield on two-year government bonds rising 10 basis points to 11.56 percent at 11:14 a.m. local time. The Athens Stock Exchange index fell 2.4 percent.

The aid deal comes after months of negotiations between Greece and its creditor nations that saw the country flirting with an exit from the euro area. Lawmakers in Germany and the Netherlands signed off on the plan Wednesday, after German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte fought off domestic opposition to push the bailout through.

Greek Prime Minister Alexis Tsipras, who was elected in January on an anti-austerity platform, approved the sweeping economic overhauls attached to the bailout at the cost of seeing his own Syriza party split. Government officials have said he will now consider his next steps, which may include fresh elections as early as September.

Greece will have about 1 billion euros of the first transfer available to shore up public finances after the rest is set aside for debt servicing and repayment of a bridge loan granted in July, the Finance Ministry said in a statement late Wednesday.

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