EuroGroup releases only 1.1bln Euros for Greece

Remaining 1.7bln to be disbursed after Greek state honours its debts to private sector

The EuroGroup Ministers have decided to release only a portion of the pending 2.8bln Euro sub-tranche to Greece, as part of the bailout program after meeting in Luxembourg, Monday. The optimistic predictions by the Greek Finance Minister, Euclid Tsakalotos that its European lenders would disburse the complete 2.8bln were dispelled, as the European Finance Ministers withheld 1.7bln until Greece settled its debt with the private sector. The decision is mainly a political one, and concerns the release of a portion of the 2.8bln sub-tranche linked to continuation of technical deliberations until all requirements are met, including the payments of state arrears towards the private sector, the immunity of the board members of the Privatisation Super Fund and the completion of banking staff. The remaining portion of the total 2.8bln Euro sub0tranche is expected to be released at during the October 24 EuroWorking Group meeting in Brussels. The EuroGroup statement makes notes “substantial progress” on the settlement of debts by the state for July and August, while its underlines the the successful payment of state debt to the private sector would result in the release of the remaining 1.7bln Euros from the European Stability Mechanism (ESM). The statement calls on Greece to speed up its progress with the institutions regarding the second review and the return of the lenders to Athens in mid-October. Entering the meeting, the President of the EuroGroup, Jeroen Dijssebloem said the situation in Greece had immensely improved, while adding that the EU desired the full participation of the IMF in the Greek bailout program. On his part, the European Commissioner on Economic Affairs, Pierre Moscovici expressed the view that the meeting was heading towards a ‘success story’. He stressed that the the collaboration between Greece and the institutions was good, expressing hope that a full agreement would be reached by the end of 2016. “The prior actions have been implemented by Greece”, he pointed out. French Finance Minister Michel Sapin said Greece had made great efforts to implement the necessary reforms.