Creditors to Disburse Loan Tranche to Greece, But No Debt Relief Discussion

Tuesday, June 6th, 2017
Last Update: 12:50

Greece’s European creditors and the International Monetary Fund are to disburse the next loan tranche to Greece but the debt relief issue will not be discussed in the June 15 Eurogroup, according to a report.

The report says that European creditors are expected to offer Greece an agreement stipulating that the 7.5 billion tranche will be disbursed before July 1. As the differences between the EU and the IMF on Greek debt sustainability remain, Europe has proposed that IMF European Department Director Poul Thomsen and Managing Director Christine Lagarde will be committed to submitting to the Fund’s Board of Directors a request for a financial program for Greece amounting to up to 5 billion euros, with a duration of 18 or 24 months.

This is expected to be confirmed at a Euro Working Group session later today (Tuesday). The IMF will maintain that its loan will only be disbursed after the summer of 2018, when the final figures for the course of the Greek economy will be ratified.

According to the report, Greece will retain the right to not ask for the IMF loan and terminate the IMF program early, one or two months after the end of the European Stability Mechanism program (August 2018), if the country can borrow from the markets at the time.

Also, the report continues, the government will receive assurances that the European side will have prepared a pre-financing program for Greece in order to support the country in its effort to borrow from the markets.

The basis of the decisions to be taken is the agreement of the May 2016 Eurogroup, according to which the second of the three stages of the Greek debt relief program will only be carried out after the successful completion of the bailout program in August 2018.

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