21 June 2013

Bloomberg: Euro area, IMF say Greek funding assured

The euro area and the International Monetary Fund said Greece is assured of sufficient international aid next month, as long as the country presses ahead with its economic-overhaul programme.

Jeroen Dijsselbloem, Dutch head of the group of euro area finance ministers, said European and IMF experts intend to wrap up their latest review of Greece’s budget-cutting progress in July. The austerity is a condition for fresh payouts of aid under a €130 billion programme. “We have discussed the state of play on the Greek programme, also on financing, and we once again concluded that financing is guaranteed for another year”, Dijsselbloem said after chairing a meeting of his euro area counterparts. “Further disbursements will be decided on the basis of the review to be finalised in July.”

The assurances came amid further political fallout in Greece resulting from the government’s June 11 decision to shut down public broadcaster ERT, suspend 2,600 jobs there and create a new, smaller company. One of Greek Prime Minister Antonis Samaras’s two coalition partners yesterday rejected his proposals for revamping ERT, weakening the government. As part of the conditions for the international aid, Greece has to reduce the number of workers on the state payroll by 15,000 by the end of 2014.

Greek Finance Minister Yannis Stournaras said that the government in Athens must push ahead with plans to shrink the public sector workforce in order to win a €8.1 billion payout for July. He said the sum could carry Greece until early 2014. Dijsselbloem said the failure of euro area central banks to roll over Greek debt held in their investment portfolios poses no immediate funding problem for the government in Athens. He said a solution would eventually have to be found to the issue.

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