It took a long time, but finance ministers of the 17-nation Eurozone, after months of wrangling with Greece, on Dec. 13 agreed to release a first series of 34.3 billion euros ($46.7 billion) almost immediately, and another 14.8 billion euros ($19.3 billion) by March of 2013.
“The meeting is over. The release of the financial aid has been accepted,” a spokesman for Eurogroup chief Jean-Claude Juncker said. The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) said the package, part of a second bailout of $173 billion, would come in four installments.
With the agreement, Greece has again – for now – avoided bankruptcy, but had to anguish through waiting for a bond buyback deal to succeed, a condition set by the lenders before releasing more aid. Much of the new loans, however, won’t go to beleaguered Greeks suffering through 2 1/2 years of pay cuts, tax hikes and slashed pensions, but to the country’s struggling banks, which will get 34 billion euros ($44.4 billion) in recapitalization funds. They had been pushed almost into insolvency when a former government imposed 74 percent losses on investors.
Greece will also use about nine billion euros ($11.75 billion) to pay long overdue bills to creditors, some of whom have been waiting months and years. The loan deal got the OK quickly in the Eurozone meeting after German Chancellor Angela Merkel, whose country is putting up much of the bailout loans keeping the Greek economy alive, signed off on it, and France went along as well.
(Sources: AP, eubusiness)
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