The borad of directors of the European Stability Mechanism approved the disbursement of 2 billion euro bailout tranche to Greece. In a statement issued Monday afternoon the ESM said that the money will primarily be used for debt service, as well as for arrears clearance, and co-financing projects funded by EU structural funds. In real world’s words this mean that the 2 billion euro will be used by the state to serve the debt, to pay apparently its own debts to private sector and to co-fund projects funded by the European Union Structural Funds. I remember that European Commissioner Jean-Claude Juncker had promised in his super 35-billion euro package to Greece that the country would not have to co-fund EU-funded projects…
“The Board of Directors of the European Stability Mechanism (ESM) today authorised the disbursement of €2 billion to Greece. This decision follows the Greek government’s completion of the first set of milestones. The disbursement approved today will primarily be used for debt service, as well as for arrears clearance, and co-financing projects funded by EU structural funds.
ESM Managing Director Klaus Regling said: “Today’s decision to disburse €2 billion of ESM funds reflects the Greek government’s commitment to the programme as it implemented an extensive list of essential reforms. These include key financial sector reforms which are important to support the ongoing bank recapitalisation process. If programme implementation remains strong, I am confident that the Greek people’s reform efforts will allow them to make visible strides towards a sound recovery”.
The €2 billion is the second disbursement of the initial loan sub-tranche of €16 billion approved in August 2015. The first part of this sub-tranche, €13 billion, was disbursed on 20 August. The remaining €1 billion will be available to be disbursed upon the completion of a second set of milestones. This is part of the ESM programme for Greece with a volume of up to €86 billion that the ESM Board of Governors approved on 19 August 2015.” (ESM statement)
The approval has now to be typically announced by the Eurogroup Finance Ministers currently meeting in Brussels.
ESM tweets ESM chief Klaus Relging:
#ESM #Regling: I’m confident that GR people’s reform efforts will allow them to make visible strides towards a sound recovery
— ESM (@ESM_Press) November 23, 2015
Greek Finance Minister Euclid Tsakalotos is awaiting in Brussels for the official approval of the 2 billion euro but also of the 10 billion euro for the banks recapitalization. However, according to information coming from Brussels, the 10 million EUR will not be disbursed unless the banks recapitalization is concluded with capital raised by private investors and the needs are clearly determined.
PS as I am waiting for the healing effect of the creditors’ structural reforms, I hear that the Greek government prepares another list of prior actions. It has to be ready in some 15 days. I hope you are not dependent on a Greek pension…
“This decision follows the Greek government’s completion of the first set of milestones” Surely that should read “MILL-STONES” as thats what they are around our necks.