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Euro countries formally approve new aid for Greece

Last Updated: Wednesday, March 14, 2012 - 23:35

Luxembourg: Countries in the 17-nation eurozone on Wednesday formally approved a second bailout for Greece and authorized the release of (euro) 39.4 billion (USD 51.44 billion), as they had signaled last week.

Jean-Claude Juncker, prime minister of Luxembourg and chairman of meetings of eurozone finance ministers, said the bailout fund - or European Financial Stability Facility - will disburse the money in several installments.

The decision was a formality, as Greece had already been found to have met all the conditions for the new aid program. Athens recently passed a new round of harsh austerity measures and negotiated a landmark debt reduction deal with private bondholders.

Juncker said the bailout "constitutes a unique opportunity for Greece that should not be missed," and urged continued reform.

"This will allow the Greek economy to return to a sustainable path," he said.

On Tuesday, Finance Minister Evangelos Venizelos said that Greece stands to receive a total of (euro) 172.7 billion (USD 225.6 billion) in bailout funds from the eurozone and the International Monetary Fund over the next few years. That sum includes money left over from the country's first bailout package, granted in 2010, as well as the new, (euro) 130 billion program.

Venizelos was briefing a Cabinet meeting on Wednesday on the results of the new debt agreements and legislation to be passed by parliament before general elections expected in late April.

Despite the bailout and the bond swap debt relief deal with private creditors, Greece is expected to have a tough time returning the economy to growth.

The latest assessment by the so-called troika - the European Union's executive commission, the European Central Bank and the IMF - indicated that Greece will have to make strenuous efforts in economic reforms and budget cleanup if its aid program is to succeed.

A copy of the report, obtained by the Associated Press, said that Greece's economy, now in its fifth year of recession, will recover more slowly than expected and will stagnate in 2013, with growth expected to return only in 2014.

Bureau Report

First Published: Wednesday, March 14, 2012 - 23:35
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