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Greece needs more prior actions before tranche disbursement possible

A delay is expected in the disbursement of the bailout tranche from Greece’s creditors. Reason for the delay is allegedly that some of the prior actions required have yet to be fulfilled.

Speaking to daily Kathimerini, sources say that instead of the decision that was to be made on Thursday, July 6, the European Stability Mechanism will instead have to decide on the eagerly anticipated disbursement a week later, on July 13 or 14.

Greece has to pay private bondholders 2 billion euros on July 17, another 290 million euros to the International Monetary Fund, and some 4 billion euros to the European Central Bank on July 20. The tranche will amount to 7.7 billion euros, with another 800 million due to be disbursed in the fall.

The payment of the tranche has been delayed because the following prior actions remain pending: the issue of a legal opinion on whether the reduction of pensions from 2019 is compatible with the Greek Constitution, a ministerial decision to determine the exact streets where stores can open every Sunday from May to October, and the adoption of a legal clause related to the liberalization of the engineering profession. The IMF insists these three actions specifically must be completed before it will propose to its board that it should participate in Greece’s new program.

Greek media reported that Managing Director of IMF, Christine Lagarde, is due to visit Athens in the very near future, however, not exact date has been set yet.

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