EG nears payout deal for Greece, decision seen Monday

21 November 2015
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Eurozone deputy finance ministers neared agreement on Friday on clearing disbursement of the next tranche of loans to Greece after institutions representing the creditors recommended a payout, with a final decision likely by Monday, officials said.

To secure the release of the money, Greece approved a reform bill on Thursday, although the vote cost the ruling coalition of Prime Minister Alexis Tsipras two deputies when dissenting lawmakers were expelled.

The bill, outlining regulation on tax arrears and home foreclosures, paves the way for the disbursement of two billion euros to pay state arrears and up to 10 billion euros to recapitalise Greece’s top four banks.

The Eurogroup Working Group, a preparatory body made up of deputy finance ministers, reached a broad agreement on Friday on measures needed for Greece to receive funds, a spokesman for Eurogroup chairman Jeroen Dijsselbloem said.

He said further details still needed to be clarified and a definite agreement on whether Greece has done what is required was expected on Saturday.

A final decision on disbursement of funds would have to be taken by the European Stability Mechanism bailout fund. Its board of directors are set to meet on Monday.

A compliance report from the European Commission was positive, eurozone officials said, but it listed one reform as still pending and three as needing to be followed up.

“I guess it’s a done deal that they will get the 2+10 billion, but some of the milestones are still not yet completed today, so a couple more days are needed,” one senior eurozone official said.

A second official also said firm decisions could be taken on Monday if all went well.

“There is clearly progress, but some questions and smaller issues remain and an in-depth and detailed analysis has not yet been done,” the official said.

A third official said the decision on the disbursement of the money for Greek bank recapitalisation was likely to be formulated in a way that would authorise the bailout fund to pay out up to 10 billion euros for the purpose.

The Greek banking sector would need only between 6 and 9 billion euros in recapitalisation money from the eurozone, the third official said.

The European Central Bank has estimated the total recapitalisation needs of Greek banks at 14.4 billion euros, but the reminder of the money is likely to come from private investors, the official said.

Reuters

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