Viable Overall Concept Agreed
Meeting in Luxembourg, the Eurogroup finance ministers have approved the disbursement of 8.5 billion euros to Greece from the third rescue package. International Monetary Fund (IMF) Managing Director Christine Lagarde promised IMF involvement.
That was what Chancellor Angela Merkel had hoped for shortly before the Eurogroup met: after tough negotiations with Greece and the IMF, Athens will receive the next tranche from the third rescue programme within the next few days. The precondition was radical reform measures on the part of Greece and the achievement of a compromise with the IMF.
IMF on board
Federal Finance Minister Wolfgang Schäuble expressed his relief. “We have found a way in which the International Monetary Fund can now adopt a programme, although funds will not be disbursed until the programme ends,” he explained before the meeting. On completion of the third rescue programme the question of debt relief will be discussed as agreed in May 2016. “We will then examine what has been achieved by then – also in the light of economic and financial developments in the intervening period,” said the Federal Finance Minister.
IMF Managing Director Christine Lagarde confirmed that she intends to recommend to the IMF a new programme for Greece. She gave the figure of 2 billion US dollars (1.8 billion euros). This is, however, dependent on the Eurogroup agreeing further debt relief with Greece at the end of the programme, she added.
Budget Committee has a say
With a view to the need for the Budget Committee of the German Bundestag to approve any solution of this sort, Wolfgang Schäuble said that he does not consider this procedure to represent any significant change to the programme for Greece. It will be up to the Budget Committee to make the final assessment. The committee will be dealing with the outcome of the meeting in Luxembourg without delay.
Since 2010 Greece has been dependent on the assistance of its European partners and the IMF. A third rescue programme worth up to 86 billion euros will run until 2018. Almost 32 billion euros have already been disbursed. In July alone Athens needs around 7.5 billion euros to repay debts.
A good outcome for all
“I think that this is a good outcome today, especially for Greece but also for the Eurogroup as a whole,” said Federal Foreign Minister Wolfgang Schäuble with satisfaction after the meeting. Greece will receive the funds it needs and the IMF “will remain on board, at least as far as the programme itself is concerned”.
[Source: The Federal Government of Germany -/- Media Relations]
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