ESM gives Greece €2.8bn second loan tranche

The European Stability Mechanism, the eurozone's bailout fund, gave Greece the remaining €2.8bn of the second loan tranche on Tuesday.

The allocation of the funds followed a commitment made by eurozone finance ministers earlier in October, on the country clearing its net arrears.

The mechanism’s financial assistance to Greece now totals €31.7bn, out of the €86bn programme for Greece.

ESM managing director Klaus Regling, said: “Today’s decision to disburse €2.8bn to Greece is a sign that the Greek people are steadily making progress in reforming their country. The government has completed key milestones in the area of pension reform, bank governance, the energy sector, and revenue collection.

“It has also taken further steps in making the new privatisation and investment fund operational. If the government continues to implement the reforms agreed in the ESM programme, growth of the Greek economy could accelerate next year and the government may be able to start issuing bonds again next year.”

Of the €2.8bn, €1.1 billion was approved following Greece meeting 15 milestones, which is to be used for debt servicing, and the remaining €1.7bn will be used for a dedicated account for clearing arrears.

“I am also pleased to note that the Greek government has fulfilled its commitment to clear arrears, as this will have a positive impact on the country’s economy,” added Regling.

Including the €2.5bn today, the ESM and the Financial Stability Facility have released €173.5bn to Greece, making the funds the largest creditor to Greece.