Euro zone clears further ¤12 bn aid for Greece
Euro zone finance ministers have agreed to disburse a further ¤12 billion to Greece and said the details of a second aid package would be finalised by mid-September.Updated: Jul 03, 2011 21:07 IST
Euro zone finance ministers have agreed to disburse a further ¤12 billion to Greece and said the details of a second aid package would be finalised by mid-September.
The 17 Euro Zone ministers agreed that the fifth tranche of a ¤110-billion bailout agreed with Greece in May 2010 would be paid by July 15, as long as the IMF's board signs off on July 8.
The payment will allow Greece to avoid the immediate threat of default, but the country still needs a second rescue package, which is also expected to total around ¤110 billion which ministers said would be worked out in the coming weeks.
Greece's finance minister said he expected it to be ready by mid-September, rather than July 11, as some had foreseen.
Between now and September, the ministers said they would work on the modalities and scale of the private sector's involvement in the second aid programme, which officials hope will total around ¤30 billion.
The ¤12-billion payment will help Athens cover a ¤5.9-billion bond redemption in August, but the government still has a mountain to climb if it is to return to debt sustainability, with its debt-to-GDP ratio above 150%.
There is growing concern among EU officials that the strictures being imposed on Greece, including ¤28 billion of austerity measures between now and 2015, are too harsh and could cause long-term damage.