Greece Set to Receive Fresh Loans Under Bailout Agreement

Eurozone bailout fund officials expected to sign off on disbursement Tuesday

The Wall Street Journal

By VIKTORIA DENDRINOU
Oct. 24, 2016 2:45 p.m. ET
1 COMMENTS
BRUSSELS—Greece’s creditors are expected to approve €2.8 billion in fresh loans for the debt-ridden country after it completed a set of key economic overhauls, three eurozone officials said Monday.

The disbursement of the next slice of financial aid, to be officially signed off by the eurozone bailout fund on Tuesday, marks the formal end of the first review of Greece’s up-to-€86 billion bailout, which was agreed to in August last year.

The loans will comprise of €1.1 billion to be used for debt servicing and €1.7 billion to repay arrears owed to domestic contractors.



Finance ministers earlier this month already agreed Greece had implemented the necessary overhauls to receive the €1.1 billion part of the tranche, despite some concerns raised by Germany that the country’s privatization fund was being set up too slowly.

The overhauls included changes to the energy sector, the pension system and the creation of a privatization fund that would be partly used to repay the country’s debt.

The remaining loan tranche was contingent on Greece successfully repaying money it owed domestic contractors.

Officials from Greece’s creditors—representing the European Commission, the European Central Bank and the International Monetary Fund—have been in Athens since last week to resume negotiations with their Greek counterparts.

A first round of negotiations on the second bailout review, which mainly focuses on the politically difficult area of labor reforms, is set to conclude by the end of the week.

Greek officials hope that discussions on the second review will be completed by early December paving the way for more discussion on the restructuring of Greek debt by year-end.

But many eurozone countries, led by Germany, argue that further discussion on debt relief for Greece isn’t due until it exits its bailout in 2018.

Still, uncertainty over the IMF’s further participation in Greece’s bailout, which is meant to be decided by the end of the second review, could weigh on any upcoming debt talks.

The IMF repeatedly has said it wants a more detailed and ambitious debt relief than what European creditors have agreed to before it can lend more money to Greece.

—Nektaria Stamouli in Athens contributed to this article.

Write to Viktoria Dendrinou at viktoria.dendrinou@wsj.com