New lifeline to Greece; pact to release euro 43.7 bn reached
Posted on: 05:48 PM IST Nov 27, 2012
Berlin: Averting Greece bankruptcy, leaders of eurozone countries and IMF have agreed to unlock 43.7 billion euros to the heavily-indebted Greek economy. The breakthrough came after 12 hours of negotiations by eurozone finance ministers in Brussels which concluded last night.
Two earlier attempts had failed to break the deadlock. This agreement of eurozone leaders strengthens the confidence that the debt-ridden Greece would remain within the 17-nation single currency bloc.
The troika of the European Central Bank, IMF and the European Commission have twice agreed to bail out Greece, pledging a total of 240 billion euros in rescue loans. Greece has received about 150 billion euros so far.
After the latest agreement, Greece would get next tranche of 34.4 billion euros in December, euro group President Jean-Claude Juncker said in a statement after their meeting. The agreement will be submitted to parliaments in some euro countries. A final approval to the disbursement of the amount will be taken after another meeting of finance ministers on December 13.
It will help the Greek government to pay salaries of civil servants and pensions in December.
The government has been claiming that without the latest instalment of bailout funds, it faced the threat of a default. The finance ministers also decided that the remaining 9.3 billion euros bailout funds will be released in three tranches in the first quarter of 2013 and their disbursement will be linked to the implementation of key reforms, especially the agreed tax reforms by January, the statement said.
Stock markets worldwide, especially Europe, cheered Greece averting bankruptcy. European indices, including London Stock Exchange's benchmark FTSE 100, were trading marginally higher in the afternoon trade. Greece has been in midst of sovereign debt crisis.