Eurogroup ministers approve partial loan disbursement for Greece amid German doubts

Eurozone ministers unlocked the first part of €2.8bn for Greece Monday after the Eurogroup agreed that Athens delivered the necessary reforms but held back more funds amid doubts from Germany.

“Greece has completed implementation of all 15 (reforms) for the first review. This paves the way to disburse 1.1 billion euros,” said Jeroen Dijsselbloem, the head of the Eurogroup of 19 eurozone finance ministers meeting in Luxembourg.

Each set of ‘reforms’ has led to more poverty for and more protests from average Greeks, who had hoped the left-leaning Syriza party, which they voted into power, would have fought against austerity demands from the EU.

Ministers also gave the green light to releasing a further €1.7bn, although these funds will be held up for two weeks because of a “technical issue”

“We hope before the end of October, the data will be available and on that basis we could decide on disbursement of 1.7 billion euros, that is also good news,” added Dijsselbloem, who is also Dutch finance minister.

The split payment came after complaints by Germany that Athens had still fallen short, but Dijsselbloem said Athens had delivered on reforms.

To satisfy Berlin, a statement from the Eurogroup of eurozone ministers urged Athens to properly deliver on details of the reforms.

The first €1.1bn is to be used for paying interest on debts, while the €1.7bn is earmarked for clearing stare debt arrears to businesses who are desperately short of cash, so that any hope for an early boost to the economy was once again thwarted by the German finance minister.

“The disbursement of the 1.7 billion euros which correspond to the repayment of arrears” will take place on Oct. 24, said Greek Finance Minister Euclid Tsakalotos, who added he was pleased with the result of Monday’s meeting.

German Finance Minister Wolfgang Schaueble did not speak to reporters after the talks.

Greece’s financial troubles make it desperate for the bailout cash, with Syriza eager to complete a second review by the end of the year, which the government believes would trigger talks on reducing the country’s huge debt load.

Germany, which holds elections next year, is not willing to discuss the issue of debt relief, but tackling the problem is a firm demand of rescue partner, the International Monetary Fund.

The Washington-based IMF, a key player in Greece’s three bailouts, has said it participate in the latest bailout until it sees a concrete plan from the Europeans to substantially cut Greece’s massive debt burden.

The IMF and EU creditors also disagree sharply on how much Athens can improve its finances through ongoing reforms while the economy is strangled by higher taxes and lack of liquidity.

“I wish the IMF remains what it is already, a structural player in this programme,” EU Economics Affairs Commissioner Pierre Moscovici said.

Athens said last week that Greece’s debt will grow to 315 billion euro or 178.9 percent of output this year.

Source: TeleSur