Greece will need to pay 1.6billion euro from its own pockets in order to be able to receive 800 million euros from the bailout trance. The Pending 8.5-billion-euro loan tranche approved by the Eurogroup on June 15, will be disbursed in two installments, European Stability Mechanism (ESM) Managing Director Klaus Regling announced on Thursday.
The statement, carried in the ESM’s newsletter, confirmed that 7.7 billion euros will be allocated to Greece in early July, ahead of the expiring maturity of previous bailout loans the same month.
The remaining 800 million euros will be disbursed after the summer, he said, under the condition that the Greek state match the second installment with its own money in order to cover arrears to the private sector.
As previously reported, money left over from paying the Greek state’s obligations in the short term will be funneled into a “cash buffer”.
Regling’s statement reads:
“First, there was good news from Greece. The country opened the way for the third tranche in its (bailout) assistance programme by completing an impressive reform package. The reforms come on top of what Greece has already done over the past years… This shows that the ESM approach works, and that Greece can be our next success story if reforms continue. The next important step is that Greece prepares a return to the market, so that it can successfully exit its programme,” he wrote.
According to revised Memorandum of Understanding, Greece will need to pay a total of 6.5 billion euros in arrears to the private sector, in tax returns and pending pensions by 2018.
News website news247.gr, notes that the Greek state will have to pay double the amount it will received by the lenders.
In order to received the 800-million euros tranche, Greece will need to put 1.6 billion euros from its own pockets.
The European Commission has reportedly recorded the arrears of the Greek state to the private sectors as totaling €6.46 billion euros.
€1.46 billion refer to pending pension applications
€850million not confirmed tax returns
€1.05 billion pending tax returns
€3.2 billion confirmed arrears to private sector (suppliers).
In the last years, the Greek state had stopped tax returns and payments to suppliers adopting a system of set-offs and settlements.
Under pressure of creditors, the tax offices started to return the arrears at least to natural persons.