Greece successfully exits three-year bailout program

09:51 | 22/08/2018 Global Economy

Greece has officially ended its three-year bailout program.

Greece’s final bailout has ended but the hardships will remain - Photo: Reuters

This follows the distribution of €61.9bn by the European Stability Mechanism (ESM) over three years "in support of macroeconomic adjustment and bank recapitalisation".

The ESM says the remaining €24.1bn, available under the maximum €86bn program, was not needed.

Greece had also received €141.8bn in loans from the European Financial Stability Facility (EFSF) between 2012 and 2015.

The total amount given by both rescue funds is €203.77bn, which the ESM says is "unprecedented in modern history"

From 2010 to 2012, Greece received €52.9bn in bilateral loans under the so-called 'Greek Loan Facility' from Euro area member states.

Members agreed the financial assistance package in back in August 2015.

"Another success story"

Mario Centeno, chairperson of the ESM board of governors, says: "Today we can safely conclude the ESM program with no more follow-up rescue programs, as for the first time since early 2010 Greece can stand on its own feet.

"This was possible thanks to the extraordinary effort of the Greek people, the good cooperation with the current Greek government and the support of European partners through loans and debt relief.

"The ultimate goal of the financial assistance plan and reforms in Greece over the past eight years has been to create a new basis for healthy and sustainable growth.

"It took much longer than expected but I believe we are there: Greece’s economy is growing again, there is a budget and trade surplus, and unemployment is falling steadily."

ESM managing-director Klaus Regling says: "Greece is the fifth country after Ireland, Spain, Portugal, and Cyprus to exit an EFSF or an ESM program.

"As the ESM and EFSF are Greece's largest creditors, holding 55 pct of total Greek government debt, our interests are aligned with those of Greece.

"We want Greece to be another success story, to be prosperous and a country trusted by investors.

"This can happen, provided Greece builds upon the progress achieved by continuing the reforms launched under the ESM program.

"We will soon provide further support to Greece as the medium-term debt relief measures, politically agreed by the Eurogroup in June, will be incorporated into lending arrangements with Greece and are expected to be approved formally by the EFSF Board of Directors this fall."

The ESM says it will continue to cooperate with Greek authorities under its Early Warning System, designed to ensure that beneficiary countries are able to repay the ESM as agreed.

For that purpose, the ESM will receive regular reporting from Greece and will join the European Commission for regular missions under the Enhanced Surveillance framework.

The International Monetary Fund (IMF) also disbursed a total loan of €32.1bn to Greece in parallel to the Greek Loan Facility and the EFSF program - of which around €21bn has already been repaid.

However, the IMF did not disburse any money to Greece in parallel to the ESM program.

Theo Newstalk