EFSF – Greek Bailout Tranche: €4.2 Bn Now, “One Billion Later”…

Panicked by the perspective of an anti-bailout left government in Greece that could set a bad example for other bailout countries and folks, Greece’s lenders use all means to increase pressure and tame future prime ministers and voters. Instead of releasing the full May-tranche amounting 5.2 billion euro, the EFSF  released only 4.2 billion euro so that the country can meet near-term obligations, like bond redeeming.

 The rest one billion euro will be paid out later, “depending on the financing need of Greece”, an EFSF statement said.

On Tuesday, the €4.2 billion arrived at a special but blocked account at the Bank of Greece.

On May 15th Greece has to pay out 435 million euro to bondholders who refused to participate to Greek bond swap (PSI).

Greek press claims the state has money to pay wages and pensions until end of June or July. 

“Euro zone governments kept Greece afloat on Wednesday after agreeing a payment of 5.2 billion euros from the region΄s bailout fund, despite opposition from some member states following the Greek election results.

According to Reuters, after a conference call, the board of the European Financial Stability Facility, the 700 billion euro bailout fund administered by the 17 countries that use the euro, agreed to make the scheduled payment, which will allow Greece to meet near-term bond redemptions and other obligations.

An initial 4.2 billion euros will be paid on Thursday, while the remaining 1 billion will be paid out later, “depending on the financing needs of Greece,” a statement said.

It said the remaining 1 billion was not needed before June.

European bond and currency markets were on edge in late trading on Wednesday out of concern the board could decide to withhold the payment because of frustration over the anti-EU/IMF bailout sentiment prevailing among Greek political parties.

“They will get the money,” one official who was on the conference call told Reuters after it ended. (Capital.gr).

As I read by a wise Twitter user commenting on EU/IMF – Greece relations and the bailout:

“As bailout money is earmarked to pay the Troika, EU-Greece relations boil down to “You pretend to reform, we pretend to bail you out.”

PS But the Greeks have to pay this pretending game… BTW: I am fed up to be threatened with bankruptcy with every bailout tranche.