Eurozone reaches the solution to transition loan to Greece – publico

                 

                         
                     

                 

 
                         

A few hours after the Greek parliament has complied with the first requirements of the agreement signed on Monday with its European creditors, the ministers of the euro zone finance reached Thursday an agreement regarding the release of a loan Transition 7000 million to Greece before it can meet its more immediate financial commitments.

                     

                         According to Bloomberg agency, which obtained the information from a politician eurozone unidentified, the meeting by videoconference Eurogroup reached a solution on how it can be immediately provided a loan to Greece, even before a financing program to three years to be designed and agreed between the parties, something that can only happen within four weeks.

Following the recommendation made by the European Commission the loan will be done through the background on which all the 28 Member States of the European Union, the European Financial Stabilisation Mechanism. It has also been found a way to convince EU countries that are not part of the euro to take part by giving them assurances that they would not take significant losses. The UK, in particular, was initially opposed to this solution.

After the meeting, there was no way to a press conference, is expected official explanations on the outcome of the Eurogroup in the afternoon. Still, for this loan advance it should still be necessary to wait for the parliaments of two countries of the euro zone, Germany and Austria, give his permission for the start of negotiations for a financing program for Greece for three years. Finland, one of the countries where opposition to an agreement is stronger, has already approved such authorization on Thursday.

The transition loan of EUR 7000 million to Greece will make a payment of 3500 million euros to the European Central Bank on July 20, to pay the debt of 2000 million that is missing with the IMF and to repay other debt of € 400 million which has over the Greek central bank. The funding will also help the country to cope with internal commitments such as paying salaries and pensions.

For now, the governments of the euro zone believe that this loan will be sufficient to ensure the financing needs until the new program to three years has been fully agreed between the troika and Athens.

However, some people have doubts that this may even materialize. And one of these people is the German Finance Minister. In an interview to a radio, Wolfgang Schäuble argued that for a power program work will be necessary to proceed to a significant debt forgiveness for Greece, which curiously is the same as has been said by the IMF and Athens.

However, the difference is that Schäuble says one such debt forgiveness is not allowed by the treaties of the European Union and that, therefore, the only way to happen is Greece temporarily leave the euro.

“No one knows at this point how this is supposed to work without a haircut and everyone knows that a haircut is incompatible with membership of the eurozone,” he said the minister.

To this Thursday is marked another important moment for the Greek crisis. The board of ECB governors meets, discussing what should be done at the emergency level of funding to Greek banks, which is currently frozen in 89 billion.

There is a possibility, before the favorable vote of the Greek parliament and the release of money to Athens pay to the ECB, this level be increased desanuviando the liquidity problems of Greek banks that currently are closed and unable to provide more than 60 euros a day to its customers through ATMs.