Finance Minister Edward Scicluna today welcomed the agreement reached yesterday by Eurogroup finance ministers.
“Eagerness to reach a solution was not enough. We had to ensure that everybody was on board, including the International Monetary Fund (IMF), so that together we agree on the way forward. That will ensure the sustainability of this whole package,” said Prof. Scicluna.
The meeting followed up the approval of an ambitious package of reforms by the Greek Parliament early yesterday, as part of a new €85 billion bailout deal.
During the meeting Prof. Scicluna said that “a programme of this nature needs a determined government to implement and that conditionality, as well as harmonisation, between the European Stability Mechanism (ESM) and the International Monetary Fund (IMF)".
The first tranche of funds to be given to Greece under the ESM programme of €26 billion will consist of two sub-tranches. The first sub-tranche of €10 billion will be made available immediately in a segregated account at the ESM for bank recapitalisation and resolution purposes.
The second sub-tranche of €16 billion will be disbursed to Greece in several installments, starting with a first disbursement of €13 billion by August 20, followed by one or more disbursements in the autumn subject to the implementation of key milestones.
A second tranche for banking recapitalisation and resolution needs of up to €15 billion can be made available after the first review and no later than November 15, subject to the completion of the planned asset quality review and stress test and the implementation of the financial sector deliverables of the review.
An assessment conducted by the Commission in liaison with the European Central Bank has concluded that Greek debt sustainability can be achieved through a far-reaching and credible reform programme and additional debt related measures without nominal haircuts.
In a statement issued at the end of yesterday’s meeting, the Eurogroup said that in line with the Euro summit statement of July 12, it was ready to consider, if necessary, possible additional measures aimed at ensuring that Greece's gross financing needs remained at a sustainable level.
These measures would be conditional upon full implementation of the measures agreed in the European Stability Mechanism programme and would be considered after the first positive completion of a programme review.
Prof. Scicluna said he was satisfied that the Eurogroup was in agreement that nominal haircuts on official debt would not be undertaken.