Creditors clear next installment of rescue loans for Greece | Business| Economy and finance news from a German perspective | DW | 26.07.2013
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Creditors clear next installment of rescue loans for Greece

Greece's creditors have said the southern European nation is entitled to yet another bailout tranche after the last obstacles were removed this week. Athens has agreed to more austerity measures.

The European Commission said Friday the decision to grant Greece another installment of bailout loans was finally taken during a conference call among deputy finance ministers, pending some national approval procedures to be concluded by Monday.

The eurozone's permanent bailout fund, known as the European Stability Mechanism (ESM), will provide a 2.5-billion-euro ($3.32-billion) tranche as of Monday out of a larger 6.8-billion-euro installment, with the rest to be paid out in line with Greece's progress to cut public spending.

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Greeks protest public sector job cuts

ESM officials said Athens would also receive a 1.5-billion-euro payout stemming from yields on bonds bought by the European Central Bank (ECB) under a now defunct monetary program.

Unpopular measures

The breakthrough for the bailout loan came as early as Thursday when the Greek parliament passed a law to place 4,200 public-sector employees in a mobility reserve scheme subjecting them to involuntary transfers and possible dismissals.

Athens also promised to cut an additional 15,000 jobs by the end of the year in a bid to reduce costs.

The measures have been met with widespread criticism from ordinary Greeks who look back at three years of harsh austerity in their country, involving pension and pay cuts as well as painful tax hikes. Radical spending cuts have dragged down the domestic economy which is now in its sixth year of recession.

hg/dr (Reuters, AP, dpa)

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