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Roundup: Eurogroup welcomes completion of first set of Greek bailout reforms

Xinhua, November 24, 2015 Adjust font size:

Eurozone finance ministers Monday said Greece had successfully met the first set of reform commitments demanded for its bailout and up to 10 billion euros (10.6 billion US dollars) earmarked for bank recapitalization will be released later.

The statement came as finance ministers of 19 eurozone countries gathered in here a monthly meeting.

The Eurogroup welcomed the assessment by the European Commission and the European Central Bank (ECB) that Greek authorities had successfully implemented the first set of milestones and the financial sector reform measures that are necessary for the successful recapitalization of the Greek banking sector.

"This is an important step towards addressing the main challenges that the Greek economy is facing and towards restoring it to a sustainable path," the Eurogroup said in a statement.

The completion of reforms has enabled a 2 billion euros payment to Greece from the bailout fund.

Hours before the Eurogroup meeting, the board of directors of the European Stability Mechanism (ESM) authorized the disbursement of 2 billion euros 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 said in a statement.

ESM managing director Klaus Regling said: "Today's decision to disburse 2 billion euros of ESM funds reflects the Greek government's commitment to the program as it implemented an extensive list of essential reforms."

"If program implementation remains strong, I am confident that the Greek people's reform efforts will allow them to make visible strides towards a sound recovery," he added.

The 2 billion euros, part of the ESM program for Greece with a volume of up to 86 billion euros, is the second disbursement of the initial loan sub-tranche of 16 billion euros approved in August 2015.

The first part of this sub-tranche, 13 billion euros, was disbursed on Aug. 20. The remaining 1 billion euros will be available to be disbursed upon the completion of a second set of milestones, according to ESM.

In addition, up to 10 billion euros of funds earmarked for the recapitalization of Greek banks can be made available too.

Eurozone deputy finance ministers (EWG) reviewed on Saturday the progress made by Athens in the bank reforms and they agreed that the policy conditions, necessary to support the transfer of funds to the Hellenic Financial Stability Fund (HFSF) have been met by the Greek authorities.

"We will now turn our attention to the next stages of the ESM program and call on the Greek authorities to accelerate the work with the institutions on a second and final set of milestones under the first tranche and on the measures needed to complete the first review," the Eurogroup's statement said.

The Eurogroup called on the Greek authorities to finalize a second set of milestones by mid-December, which would unlock the disbursement of a further 1 billion euros, and to take all the necessary decisions needed to remove bottlenecks on key projects (including metro, motorways, environment) co-funded by the EU and European Investment Bank. Enditem