“EU Source” Claims No €31-Billion Bailout Tranche Before October

Posted by in Economy

The notorious but anonymous “EU source” spoke again. And said that Greece would not receive the €31-billion bailout tranche before upcoming October. Greece has been expecting to receive the financial aid in September, but the EU source claimed Greece’s lenders won’t give any green light to the tranche, before the Eurogroup meeting in beginning of October – and not beginning of September as everybody believed.  The  Troika would move to Athens in early September and stay a whole month in order to prepare the report on Greece’s fiscal progress and brief the Eurogroup meeting that would take place on October 8th 2012.

             No Fresh Greek Bailout Tranche Before Oct. 8-EU Official

“The member states need to have a clear picture of what’s going on and where we are before deciding to start paying again,” the EU official said to explain the delay. He added that the political turbulence caused by elections in May and June had created “considerable delays in the implementation” of the program.

The Greek government –a coalition of three parties– has been trying to agree on a series of further cuts and structural reforms to meet targets set by the country’s creditors, amid concerns that it is slowly running out of cash.

A EUR3.1 billion bond held mostly by the ECB matures on Aug. 20, posing an immediate liquidity risk to the twice-bailed-out nation.

The EU official said that the troika working with the Greek authorities until last week had been “able to identify concrete measures” for EUR7 billion in cuts, out of EUR11.5 billion needed until 2014.

“In September, we’ll need to work on the remaining EUR4.5 billion so that they’re also concrete and implementable, not just fuzzy words,” he added.

The EUR31-billion tranche was due by the end of June and includes EUR25 billion to recapitalize the country’s banks.

The timetable for aid disbursements is set out in Greece’s memorandum of understanding with its creditors. But the official says it is “no longer applicable.” (Full article: WSJ, also AFP)

And there, Greeks will be running out of cash again, and there, they will have to hear the government’s and the EU’s blackmailing: Either the 11.5 billion euro spending cuts and austerity measures will be approved at the Palriament or Athens will have no money to pay wages and pensions.

PS Been there, seen that. Every three months since May 2010, when Greece signed the first bailout. More than two years ago. It’s really exhausting…