HURAAH! HURRAH! The European Stability Mechanism approved the third bailout tranche of €8.5 billion new loan to Greece. The large part of the ESM financial assistance, €7.7billion, is expected to be made by the ESM on Monday. The rest €0.8 billion may be made after 1 September 2017 provided Greece makes significant progress in arrears clearance.
Millions of Greeks took to the streets to celebrate the event… JUST KIDDING.
The largest part of the so-called financial assistance which is in fact a loan will go to debt service.
From the total amount of €8.5 billion
€7.7billion will come next week:
€6.9 billion will be used for debt servicing needs and €0.8 billion for arrears clearance.
The rest of the bailout tranche, €0.8 billion, may be made after 1 September 2017
No only Greeks cheered.
Eurogroup chief hailed the “joint effort” to save Greece but starve Greeks.
— Jeroen Dijsselbloem (@J_Dijsselbloem) July 7, 2017
Some mean Twitter-user tweeted this to Dijsselbloem.
thankfully the EU neo-liberal economics gurus know like no other how to return greece to "growth"pic.twitter.com/FsP2YEtr8w
— Kever (@superweh) July 7, 2017
The Board of Directors of the European Stability Mechanism (ESM) today approved the third tranche of €8.5 billion of ESM financial assistance to Greece. This follows the approval of the Supplemental Memorandum of Understanding by the ESM Board of Governors and the Greek government’s completion of all prior actions last Wednesday.
The first disbursement under this tranche will amount to €7.7 billion, and is expected to be made by the ESM on Monday.
Out of this amount, €6.9 billion will be used for debt servicing needs and €0.8 billion for arrears clearance.
ESM Managing Director Klaus Regling said: “Today’s decision by the ESM Board of Directors shows that Greece has completed the reforms required at this stage. The government and people of Greece deserve recognition for having come a long way in returning to fiscal sustainability and economic growth. The government should continue on this path to rebuild a competitive economy and regain investors’ trust.”
A further disbursement for arrears clearance of €0.8 billion may be made after 1 September 2017 subject to Greece making significant progress on arrears clearance, using its own resources to the arrears clearance effort as well as the funding from the disbursement approved today. It is subject to a further decision by the ESM Board of Directors.
After the disbursement approved today, ESM financial assistance for Greece will reach €39.4 billion, out of a total programme volume of up to €86 billion. Together the ESM and the EFSF have so far disbursed €181.2 billion to Greece (including the amount approved today), making the rescue funds the largest creditors to Greece by far.
The ESM Board of Governors comprises the finance ministers of the ESM Members. The ESM Board of Directors comprises deputy finance ministers and other high finance ministry officials of the ESM Members.
PS If the ESM pays by Monday, I expect growth to be here by Thursday, Friday …