Greek Aid of $7.7 Billion Is Said to Be Cleared by Euro Finance Ministers

Bloomberg
November 29, 2011

Euro-area finance ministers approved a 5.8 billion-euro ($7.7 billion) loan to Greece under last year’s bailout after eliciting budget-austerity pledges from Greek political leaders backing a unity government, a European official said.

The finance chiefs from the 17 nations using the euro cleared the payment at a meeting today in Brussels, said the official, who spoke on condition of anonymity.

The go-ahead for the sixth disbursement of funds under the fully taxpayer-funded package of 110 billion euros shifts the spotlight to a second rescue of Greece that foresees 50 percent losses for private investors in Greek bonds. The new aid plan, crafted at an October summit, also includes 130 billion euros in extra public funds.

After initially endorsing the next loan for Greece on Oct. 21, the euro area froze the payment this month because former Socialist Premier George Papandreou called a referendum on the rescue plan. He later called off the vote, resigned and was succeeded by ex-central banker Lucas Papademos, whose interim government has the support of three parties to press ahead with budget cuts needed for continued aid.

“In Greece, we have all the necessary conditions in order to go ahead with the next disbursement,” Greek Finance Minister Evangelos Venizelos said in an e-mailed statement today before the decision in Brussels. “We have the necessary political consensus, we have the necessary national unity and also the national commitment and determination to go ahead.”

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