BRUSSELS: Greece’s international creditors on Tuesday (Wednesday in Manila) handed over a payment of 1.0 billion euros under the terms of its third bailout program after Athens met their demands for further tough economic reforms.
The European Stability Mechanism, the 19-nation eurozone’s bailout fund, said the funds will help Athens repay debt, balance the budget and finance projects.
“With the disbursement of one billion euros, the ESM is supporting the Greek government in its reform process,” ESM head Klaus Regling said in a statement.
“The reforms cover a wide array of policy fields that are important to modernize the Greek economy,” he said.
The Greek government said earlier this month it had established a privatization fund and planned to sell a major stake in electricity distributor Admie, the latest reforms sought.
The creditors—the European Commission, the European Central Bank, the International Monetary Fund and the ESM—finalized a third Greek debt rescue program in August worth 86 billion euros ($94 billion) after Greece looked to be on the brink of crashing out of the eurozone.
Two other rescues since 2010 worth a combined 240 billion euros, plus a private-sector debt writedown of more than 100 billion, had failed to stabilize the economy as Athens struggled to implement the austerity measures demanded in return for fresh funding.
Left-wing Prime Minister Alexis Tsipras reluctantly accepted the third debt program but insists Greece’s debt mountain—amounting to nearly twice annual economic output—must be cut if the country is ever to stand on its own feet again.
This has divided the creditors, with the IMF saying the debt can never realistically be repaid and must be cut sharply to avoid another disaster while the Commission, the ECB and ESM say it must first adopt the reforms they say are essential to avoid any repeat.
Regling reiterated that the debt can only be addressed if Greece continues to live up to its commitments on reform.
“I hope the good cooperation with our Greek partners will continue, so that the first review of the ESM program can be completed in early 2016,” Regling said.
“Only a successful conclusion of this review can lead to discussions on further debt relief for Greece, as the [group of eurozone finance ministers]has said before,” he said.
The one billion euros is the last tranche of the initial bailout funds worth 16 billion euros decided in August.
The ESM has also provided Greece with a separate 5.4 billion euros to help recapitalize its struggling banks.