Loan Tranche for Greece could be €9-11 Bln After Deal is Signed

bailout programThe next loan tranche for Greece might be 9-11 billion euros, after the bailout program review is completed, according to a Kathimerini report.
European lenders – the European Stability Mechanism, European Central Bank and European Commission – are close to an agreement on the first package of required measures amounting to 5.4 billion euros. However, there is distance on the automatic spending cuts mechanism Athens has proposed instead of the creditors’ proposal for an additional 3.6-billion-euro in contingency measures that need to be taken if fiscal targets are off in 2017.
The decision whether Greece has fulfilled its obligations will be taken in the May 24 meeting of euro zone finance ministers. If the bailout program review is completed and a deal is reached, the next installment of the bailout loan will be disbursed.
According to the Kathimerini report, a European official said that the next tranche, “may be in the range of 9-11 billion euros.” The source explained that in October 2015 – when the review was supposed to have been completed – the tranche was assessed to be 5.7 billion euros. However, Greece’s financial needs have changed after the delay of the review. Now Greece has loan repayments due which, until October 2016, average 700-800 million euros per month.
The official said that besides loan repayments, Athens must begin to pay arrears. Otherwise the results would be “devastating for the economy.”
According to the European official, it is expected of Greece to present a renewed proposal regarding the precautionary measures mechanism over the weekend, so it will be enacted next week. It is requested of Athens that wages and pension cuts should not be excluded from the spending cuts mechanism and that it should be connected to next year’s budget.
Furthermore, the European official told Kathimerini that the goal for the 2018 primary surplus remains at 3.5% of GDP,  and estimated that if Greece took no measures whatsoever, the primary surplus would be at 0.5% for that year.
Regarding the new privatization fund, the European official stated that is expected to yield 6 billion euros in revenues by 2018, and it will incorporate public companies based on the French model and part of state properties. The Board will consist of five persons, two of whom will be appointed by the European Commission.
On the relaxation of capital controls, the official said that it must be done very carefully, as a matter of trust, and there should be no capital outflow.

See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!