Tags: greece | bailout | funds | imf

Improving Greece May Not Need All Its New Bailout Loan

Image: Improving Greece May Not Need All Its New Bailout Loan

 (Dollar Photo Club)

Monday, 20 Feb 2017 06:53 AM

Greece may need far less in bailout loans from international lenders because its finance are improving better than expected, the head the euro zone bailout fund was quoted on Monday as saying.

Athens underlined this by making an expected 2 billion euro repayment to the fund, the European Stability Mechanism (ESM)

Klaus Regling, the fund's managing director, told German newspaper Bild that at the end of Greece's money-for-reforms package in August 2018, the ESM will "probably have paid out far less than the agreed maximum amount of 86 billion euros" because the Greek budget was developing better than expected.

After receiving the 2 billion euros, Regling said in a statement: “The prompt payment shows Greece is a reliable contract partner. It is a sign that the restructuring of the Greek banking sector is progressing well."

Euro zone finance ministers were to meet later on Monday in Brussels to assess Greece's progress in fulfilling the conditions of its bailout. .

The review of the Greek bailout programme has been beset by delays and disputes between Athens and its European Union and International Monetary Fund creditors. As disagreement has arisen over Greece's fiscal targets, debt relief and promised reforms, fears have grown that Europe could face a new financial crisis.

Greece has said it cannot cut pensions any further as demanded by the International Monetary Fund while some of its European lenders, led by Germany, have rejected the IMF's demand to grant it debt relief of some sort - perhaps on payments and maturity - now.

The IMF has insisted on debt relief and precautionary fiscal measures to ensure that Athens can meet its fiscal targets before it will consider participating in the bailout.

The German government, gearing up for election in September, opposes debt relief for Greece as demanded by the IMF, and says the current programme can only continue if the IMF joins in.

The IMF's participation remains unclear and this question is likely to be one of the main talking points when German Chancellor Angela Merkel and IMF Managing Director Christine Lagarde meet on Wednesday.

The IMF declined to comment on a German magazine report on Friday that it was likely to contribute up to 5 billion euros ($5.3 billion) to a third bailout package for Greece, saying its views on the deal had not shifted.

Regarding Monday's repayment, the Hellenic Financial Stability Fund (HFSF) said it was related to contingent convertible bonds issued by National Bank, Greece's second largest.

In December 2015, the HFSF provided capital support to National by buying 2 billion euros worth of the bonds the bank had issued.

NBG used proceeds from the sale of its Turkish subsidiary Finansbank to repay the bonds.

© 2017 Thomson/Reuters. All rights reserved.

   
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Greece may need far less in bailout loans from international lenders because its finance are improving better than expected, the head the euro zone bailout fund was quoted on Monday as saying.
greece, bailout, funds, imf
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2017-53-20
Monday, 20 Feb 2017 06:53 AM
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