Europe approved the next stream of financial assistance to Greece on Tuesday in the sum of 6.7 billion euros, following the country’s successful completion of all prior actions required by the board of the European Stability Mechanism (ESM).
The decision was hailed by Eurogroup President Mario Centeno who welcomed the decision of the European Stability Mechanism's (ESM) to disburse the loan tranche to Greece with a message on Twitter.
"I welcome the ESM Board of Directors decision on the disbursement of E6.7 billion loan tranche to #Greece. A chunk of the funds will be pumped into the Greek economy and will help Greece build up its cash buffer. That's good news," Said Centeno, who also serves as ex officio chair of the ESM board.
The tranche will be used for debt service, domestic arrears clearance and for establishing a cash buffer. The Board also approved an amendment to the Financial Assistance Facility Agreement (FFA) between the ESM and Greece.
"The Board of Directors approved for release the first disbursement under this tranche, amounting to 5.7 billion euros. The disbursement is expected to be made by the ESM on Wednesday, 28 March. A further disbursement for arrears clearance of 1 billion euros may be carried out after 1 May 2018. It is dependent on Greece making progress in reducing its stock of arrears and improving the effectiveness of the e-auction system. This subsequent disbursement is subject to a further decision by the ESM Board of Directors."
"Today's decision by the ESM Board of Directors acknowledges the hard work by the Greek government and Greek people in completing an extensive set of reforms. These include important actions in the field of privatisation, public revenue collection, tax policy and resolution of non-performing loans (NPLs). The fourth and final review of the programme has already started and I am confident that Greece is on track to successfully exit the ESM programme in August 2018, provided that the remaining reforms are implemented by the Greek government", said ESM Managing Director Klaus Regling.
The ESM announced noted that with the 5.7 billion euros disbursement approved on Tuesday, ESM financial assistance for Greece will reach 45.9 billion euros, out of a total programme volume of up to 86 billion euros. Together the ESM and the EFSF have so far disbursed 187.77 billion euros to Greece (including the amount approved on Tuesday), making the rescue funds the largest creditors to Greece by far.
