Eurozone finance ministers approved a new €6.7 billion loan for Greece on Monday after Athens pushed through controversial reforms.
The working group of EU finance ministers said, however, that disbursement is not possible until the Greek government fully follows through in adopting the final round of “prior actions” that international lenders have demanded before paying out new loans.
The lenders claim that Greece has so far only implemented 92 of the 110 agreed steps needed to receive loan payouts.
European Commissioner for finance Pierre Moscovici, told reporters after the first Eurogroup meeting with Portugal’s Mário Centeno as president ended with the group of finance ministers agreeing that all auctions should be carried out electronically via a new platform that is already in place.
According to Centeno and the European Stability Mechanism (ESM) managing director Klaus Regling, the latest tranche from Greece’s third financial rescue programme since 2010 amounts to €6.7 billion euros and will be used to cover debt servicing (€3.3 billion), arrears (€1.5 billion) and to boost Greece’s cash reserves (€1.9 billion), the last which is considered the most critical component of the package as it is “critical to ensuring Greece’s full market access,” according to the Eurogroup president.
The first €5.7 billion sub-tranche is expected to be paid to Greece in February for debt servicing needs, with the remaining €1 billion paid in April, according to Regling.
Centeno said that the eurozone would now start to look at cutting Greece’s debt, equivalent to 180 percent of its annual economic output. “Looking ahead we can start with technical work on debt relief measures,” he said.
The Eurogroup will focus on measurements linked to economic growth to help with debt relief, to which Greek Finance Minister Euclid Tsakalotos responded at a press conference that Athens will present an action plan aimed at persuading EU institutions that there is a holistic approach to Greece’s growth strategy.
“The holistic growth prospect for Greece that we call upon is considered critical to making sure that the post programme status gains ownership in the country,” said Centeno, in comments that echoed the Eurogroup’s most recent statements about Greece.
ECB vice-president candidate list to be released by February 7
Eurozone governments on Monday kicked off the process of finding a successor for outgoing ECB Vice-President Vítor Constâncio, whose term expires in May.
A February 7th Eurogroup meeting will be the deadline for members to propose candidates before the Economic and Financial Affairs Council formally approves the candidates and includes them on the European Council.
Spanish Finance Minister Luis de Guindos is widely expected to succeed Constâncio as vice-president.