Mon, Apr 15, 2013 - Page 15 News List

Troika finishes Greek aid review: source

TARGETS:Germany’s finance minister said a 2.8 billion euro tranche of funds had not been released yet because Greece had not reached all of the agreed bailout milestones

Reuters, DUBLIN and ATHENS

An inspection team of international lenders has finished its review of Greece’s austerity program, paving the way for another 10 billion euros (US$13 billion) aid payment, a source with knowledge of the talks said on Saturday.

The deal reached on Friday, concludes the first review by the so-called “troika” of the European Commission, the IMF and the European Central Bank since they unlocked fresh aid in December last year, staving off a chaotic bankruptcy.

In exchange for the December deal in Greece’s 240 billion euro bailout, Athens passed a fresh round of austerity measures.

“The third review mission of the program was completed last night in Athens with a staff level agreement,” one delegate with knowledge of the discussions said.

The official added the Eurogroup of eurozone finance ministers and the IMF’s board would each likely discuss the agreement next month, a condition for the money to actually be paid.

Klaus Regling, the head of the eurozone’s rescue funds, said on Friday that the European Financial Stability Facility (EFSF), under which Greece’s rescue is handled, stood ready to disburse 10 billion euros to Athens once conditions were met.

“Greece would get 2.8 billion euros after the milestones have been met. In addition, 7.2 billion [euros are] available in bonds to recapitalize the banks. This is based on a tranche already approved last December,” he said.

Greece has received about 200 billion euros in rescue loans since its first bailout in May 2010. However, despite imposing a 75 percent debt cut on private-sector bondholders and receiving debt relief from its official lenders last year, it is still far from a return to the bond markets.

After a meeting of EU finance ministers, German Finance Minister Wolfgang Schaeuble said a 2.8 billion euro tranche of funds this month had not been released yet because Greece had not fulfilled some of the bailout milestones.

“The Greek side explained it is fully committed and we hope that this will be the case by the next meeting,” Schaeuble said.

The recapitalization of Greece’s banks and shrinking the country’s spendthrift public sector have been key issues on the agenda of talks with the troika, which resumed its visit in Athens earlier this month.

Greek Prime Minister Antonis Samaras met his coalition partners on Saturday to discuss the hot topics and the progress of the troika review.

After the meeting, Greek Deputy Finance Minister Christos Staikouras said talks with the troika would be wrapped up by today.

“I believe the ultimate details of a deal with the troika will be finalized by Monday night,” Staikouras said.

Greece has agreed to dismiss 15,000 public sector workers and hire as many younger employees, he said.

About 4,000 workers will leave by the end of the year and another 11,000 next year, party officials said. The state is expected to cut more than 180,000 by 2015.

Greek socialist leader Evangelos Venizelos said the troika was expected to approve the political leaders’ proposals by yesterday.

Under Greece’s current bailout plan agreed in November last year, Athens has to cut 150,000 public sector jobs overall from 2010 to 2015, about a fifth of the total, through hiring curbs, retirement and dismissals.

“We have designed a commonly accepted framework which I hope the troika will accept by Sunday night,” Venizelos said. “We must close all the issues.”

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