Creditors hand Greece 1 billion euros

Illustrative image (Source: theguardian.com)

The European Stability Mechanism, the 19-nation eurozone's bailout fund, said the funds will help Athens repay debt, balance the budget and finance projects.

"With the disbursement of one billion euros, the ESM is supporting the Greek government in its reform process," ESM head Klaus Regling said in a statement. "The reforms cover a wide array of policy fields that are important to modernise the Greek economy," he said.

The Greek government said earlier this month it had established a privatisation fund and planned to sell a major stake in electricity distributor Admie, the latest reforms sought.

The creditors -- the European Commission, the European Central Bank, the International Monetary Fund and the ESM -- finalised a third Greek debt rescue programme in August worth 86 billion euros ($94 billion) after Greece looked to be on the brink of crashing out of the eurozone.

Two other rescues since 2010 worth a combined 240 billion euros, plus a private-sector debt writedown of more than 100 billion, had failed to stabilise the economy as Athens struggled to implement the austerity measures demanded in return for fresh funding.

Left-wing Prime Minister Alexis Tsipras reluctantly accepted the third debt programme but insists Greece's debt mountain -- amounting to nearly twice annual economic output -- must be cut if the country is ever to stand on its own feet again.

This has pided the creditors, with the IMF saying the debt can never realistically be repaid and must be cut sharply to avoid another disaster while the Commission, the ECB and ESM say it must first adopt the reforms they say are essential to avoid any repeat.

Regling reiterated that the debt can only be addressed if Greece continues to live up to its commitments on reform.

The one billion euros is the last tranche of the initial bailout funds worth 16 billion euros decided in August.

The ESM has also provided Greece with a separate 5.4 billion euros to help recapitalise its struggling banks./.

Source: EUbusiness