The Greek government secured a crucial €4.8 billion aid payment from international bailout lenders after an agreement on further cuts to the public payroll in Greece removed one of the biggest challenges to the country's €172 billion bailout.
Despite the official sign-off by eurozone finance ministers at a meeting in Brussels, there were warnings from some EU policy-makers that Greece still faced an uphill struggle to keep its rescue programme on track. “The path for Greece will remain a difficult one. I would warn against any illusions”, said Wolfgang Schäuble, Germany’s finance minister. “It is far from the case that all problems are resolved.”
The approval of the funding, €3 billion of which will come from the eurozone and €1.8 billion from the International Monetary Fund, came only after an 11th-hour deal between Athens and negotiators for the “troika” of lenders – the European Commission, European Central Bank and International Monetary Fund – on the most vexing issue, the reduction of public sector staffing.
Greek efforts to meet troika redundancy targets led Antonis Samaras, the country’s prime minister, to shutter its national broadcaster last month, setting off a wave of protests that nearly brought down the government.
The eurogroup’s approval of the aid payment to Greece marked a significant turnaround for Mr Samaras, whose government saw a junior coalition member defect over the broadcaster shutdown, bringing its parliamentary majority to just four votes and putting his reform efforts at risk. Eurozone officials said they would split the tranche into at least two sections – the bulk to be paid by early August – so they can maintain pressure on Greece to continue reforms. Some €1 billion in EU aid will held back until October.
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