Eurozone grants new loan to Greece and work on debt relief measures

Galtero Lara
Marcha 14, 2018

Greece's economy expanded by 1.6% previous year after emerging from a long recession.

The euro zone bailout fund is expected to pay out a €5.7bn euro loan later in March, Eurogroup head Mario Centeno told a news conference following the finance ministers' monthly meeting, after Greece met commitments under the third review of its rescue programme. This will allow Greece to assess other loans and raise money from the global markets.

Among the remaining tasks are further privatizations and liberalization of the gas and electricity markets.

Economic affairs commissioner Pierre Moscovici warned that the fourth programme remained hard, involving 88 more reforms, but he expressed confidence that Greece would get it over the line.

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Centeno said these measures are preconditions to granting Greece new debt relief.

Centeno said that work was under way on linking future eurozone debt relief to the rate of Greek economic growth, with the objective of granting support if growth slowed. Centeno said he is feeling positive about their ability to come through. "The program ends in August, the deadlines are tight and our goal is that everything is over by June 21st".

Among the options being discussed is making any funds that remain unused after the bailout program ends on 20 August, estimated to be up to €27 billion, available for use, or alternatively returning profits made by the European Central Bank on Greek bonds. Greece could ask for a new credit line after its aid programme ends, but this is likely to be seen in the country as a new wave of austerity, triggering a political backlash.

Global developments will also play a role, as they may well affect Greece's full return to the markets, along with the banks' stress tests whose results will be announced on May 5.

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