In a continuation of the constant cat-and-mouse game it plays with Greece, Eurozone officials on July 26 approved the release of a briefly-delayed 2.5 billion euro ($3.31 billion) overdue loan installment after the government approved amendments to complete its long-delayed prior action agreements.
For the last three years, first with a $152 billion initial bailout that’s been spent, and now with an ongoing series of loans as part of a second rescue package of $173 billion, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) has occasionally withheld loan installments until Greece fulfilled commitments after dragging its feet.
Each time there was anguish over whether the money would be released and if Greece would be forced out of the Eurozone and every time the Troika has released the money after the government did the minimum needed to keep it coming.
This time, the Troika was anxious to give Greece enough money to quell social unrest and prevent any more debates over loans until after the German elections in September. German Chancellor Angela Merkel is a backer of Greek bailouts, but only at the cost of harsh austerity measures and with her country putting up much of the money she was seen as keen on keeping Greece quiet until after her re-election bid.
Euro-area governments approved the payment on a conference call of senior finance officials after Greece moved to begin the process of firing as many as 40,000 public workers over the next two years.
Greece is also scheduled to receive 1.8 billion euros ($2.38 billion) from the IMF and to recoup 2 billion euros ($2.6 billion) in profits made by European central banks on Greek bonds in their portfolios.
Simon O’Connor, a spokesman for European Economic and Monetary Affairs Commissioner Olli Rehn, announced the Euro Working Group’s decision to approve the next tranche for Greece via Twitter.
“#EWG green light for #Greece: €2.5bn from EFSF, €1.5bn SMP income to be dibursed subject to completion of national procedures on Monday,” he wrote.
The IMF meets July 29 to discuss its portion, German Deputy Finance Minister Steffen Kampeter said this week. A German Parliament committee meets the same day to give the go-ahead for Germany’s contribution.
The release of the latest tranche comes after MPs approved an amendment that means Education Ministry workers with postgraduate degrees are no longer exempt from being placed in a labor mobility scheme.
A total of 25,000 public sector workers will be placed in a mobility scheme by the end of the year. Of these, 12,500 have to be found by the end of September. This year, 4,000 civil servants will have to be fired and the total number of sackings will must rise to 15,000 by the end of next year.
The government has also committed to completing organization charts for ministries by the end of September, when it will also have to finalize the criteria for evaluating which of the civil servants placed in the mobility scheme will be moved to other positions and which will be fired. The workers will be allowed to stay in the labor pool for a maximum of eight months.
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