Click:filling torch

Finance ministers approve €4bn for Greece

Further loans will be granted in August and October subject to the implementation of reforms; Olli Rehn issues Slovenia warning; IMF says eurozone still vulnerable.

Click Here: Fjallraven Kanken Art Spring Landscape Backpacks

Eurozone finance ministers tonight (8 July) agreed to grant Greece another part of its bail-out – but stopped short of disbursing the full instalment in one go.

Greece will get €4 billion from the eurozone’s rescue fund by the end of this month and a further €1bn in October subject to the implementation of reforms, including improvements in tax collection and a reduction in the size of the public sector.

“Significant further work is needed over the next weeks to fully implement all prior actions required for the next disbursement,” said Jeroen Dijsselbloem, the finance minister of the Netherlands who chaired tonight’s meeting.

The agreement followed this morning’s conclusion of week-long negotiations in Athens between the Greek government and the ‘troika’ of Greece’s international lenders – the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF).

The troika has been dissatisfied at the pace of reform in Greece and warned that many of its economic and structural reform targets were off track.

“Ensuring a rapid and full implementation of all the remaining reform measures, including the prior actions, is essential for mitigating risks to the [bail-out] programme and for bringing about sustained growth and employment and for securing the sustainability of public finances,” Dijsselbloem said after tonight’s meeting.

Greece will get a loan of €2.5bn this month and a further €500 million in October, subject to the implementation of reforms. On top of this the country will get €1.5bn from the ECB’s special arrangement of giving the profits of its holdings of Greek bonds, and €0.5 in October. The IMF is expected to approve a loan of €1.8bn in August.

The latest disbursements follow the loan of €3.3bn granted by the eurozone’s rescue fund, the European Financial Stability Facility (EFSF) last month, which brought the total level of lending to €131bn, out of the agreed total of €145bn.

“It is time to keep up the momentum of reform,” said Olli Rehn, the European commissioner for economic and monetary affairs and the euro, who also attended tonight’s meeting.

Rehn also had words of warning for Slovenia following today’s talks. He said that the remarks he made in April that problems in the country’s banking sector were “serious, but manageable if urgent action is taken”, still held true. But now, he added, “the clock is ticking”.

Christine Lagarde, the managing director of the IMF, also attended this evening’s meeting, delivering her organisation’s latest assessment of the state of the eurozone.

She said that progress in shoring up the currency’s fragility had been made over the past year, yet “illusive” growth and rising unemployment “leaves the euro area vulnerable”.

She called on eurozone member states to complete a banking union as soon as possible and said that a fully fledged single bank resolution mechanism, expected to be proposed by the Commission on Wednesday (10 July), was vital.