The Eurogroup has given the green light to the third Greek bailout of 86 billion for the next three years. The first tranche of aid should be worth 26 billion euros. "The political agreement has been reached" by the Eurogroup, announced the president of the Eurogroup, Jeroen Dijsselbloem, at the end of the meeting, underlining that the third aid program is "86 billion euro" for the next 3 years. "We welcome the measures taken by the Greek government," he underlines. In particular, he explains, "There will be a strengthened privatization plan." The Council of Governors will meet by Wednesday to evaluate the agreement.
Of the first tranche of 26 billion, 10 will arrive immediately to recapitalize the banks. Another 13 will be paid by 20 August. The rest will be given in the autumn following the implementation of the measures contained in the Memorandum. A second 15 billion tranche for bank recapitalization will be made available after the first program review and no later than November 15, following the "asset quality review" and stress tests. According to Greek Finance Minister Euclid Tsakalotos, the bailout will be "tested" every 3 months.
The Eurogroup has asked Greece to create and implement the privatization fund by the end of the year, which will also include some banks after the recapitalisation. The fund will have to make 50 billion by putting assets on the market.
“The Eurogroup considers it indispensable and welcomes the IMF's intention to recommend to the board new support for Greece once agreement on possible debt relief is reached”. It reads in a note. Once approved, the IMF commitment will reduce that of the ESM.
“Greece is and will be an irreversible member of the Eurozone. The EU Commission will support Greece to develop growth. Employment, investment". said the president of the EU Commission, Jean Claude Juncker at the end of the night press conference of the Eurogroup.
With these words, after the tensions of the last few days which saw Germany put its foot down and threaten a new bridging loan pending better clarification of the contents of the Greek plan, the ministers therefore smoothed out the rough edges towards the agreement. The agreement was reached after the Greek parliament, on Friday morning, had approved the agreement with the creditors with 222 votes in favour, 64 against and 11 abstentions. But to obtain consensus, Prime Minister Tsipras had to resort to the support of the moderates while a strong split occurred in the majority. So much so that a split between about forty Syriza representatives led by former Finance Minister Yanis Varoufakis cannot be ruled out. Tsipras hinted that next week he could ask for the vote of confidence to his government, a scenario that could open the door to early elections.
