Greece’s Aid Payment Approved, Ending Standoff With Euro Areaby and
Payout part of 86 billion-euro bailout deal reached last year
Greece enacted various measures to clear way for assistance
Euro-area finance ministers approved the payment of 7.5 billion euros ($8.5 billion) of aid for Greece, ending months of wrangling over the nation’s economic reforms.
The finance chiefs endorsed the disbursement at a meeting of the European Stability Mechanism, the 19-nation bloc’s firewall fund, in Luxembourg on Thursday. The payout will cover Greece’s debt-servicing needs as well as the clearing of some arrears.
The financial aid is part of the 86 billion-euro bailout agreed to between Greece and the euro area last year. The installment comes after the Greek government pushed through a series of austerity measures and tax and pension reforms as well as steps to reduce the number of non-performing loans on bank balance sheets.
“This will bring real oxygen to the Greek economy,” European Union Economic Affairs Commissioner Pierre Moscovici told reporters after the resolution. “This government is making difficult, courageous reforms, but needed reforms in order to have a more sustainable and stronger economy.”
The ESM will meet again on Friday to make a final decision on the disbursement of the funds, which could be released early next week, ESM Managing Director Klaus Regling said in Luxembourg.
Greece also put in place a mechanism to trigger contingency austerity measures in case the debt-ravaged nation misses primary surplus targets.
The euro area is scheduled to disburse a further 2.8 billion euros due in this round of aid payments at a later date after Greece has fulfilled conditions linked to privatizations.