Eurozone approves 6th tranche of loans to Greece

Updated: 2011-10-22 10:34


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Eurozone approves 6th tranche of loans to Greece

(L-R) Luxembourg's Prime Minister and Eurogroup chairman Jean-Claude Juncker, IMF President Christine Lagarde, Germany's Deputy Finance Minister Joerg Asmussen and Finance Minister Wolfgang Schaeuble talk at the start of an Eurozone finance ministers' meeting in Brussels, Oct 21, 2011. [Photo/Agencies]

BRUSSELS - Eurozone finance ministers Friday decided to unblock the six tranche of bailout loans the debt-ridden country secured last year, in order to keep Athens afloat for just a few more months.

"We have agreed to endorse the disbursement of the next tranche of financial assistance to Greece in the context of the current economic adjustment program," said a statement released by the ministers' meeting here in Brussels.

However, the disbursement of the 8 billion euros (about $11.1 billion) still has to be approved by the Board of the International Monetary Fund (IMF), said the statement.

The development came a day after the Greek parliament approved new austerity measures at the request of its impatient international lenders.

"We welcome the substantial fiscal consolidation efforts undertaken by the Greek government, which will allow it to meet the targets for 2012," according to the statement.

Meanwhile, the ministers called on the Greek authorities to make further progress with the implementation of structural reforms and the privatization program.

To ensure debt sustainability, the ministers said "we will conclude a second economic adjustment program for Greece, with an appropriate combination of additional new official financing and private sector involvement."

This sixth tranche of loans should have been granted to Athens in mid-September this year as part of the 110-billion-euro bailout package Athens secured with the so-called troika of the European Central Bank, the European Union and the IMF in May 2010. But it has been blocked after a joint mission of the troika decided the Greek government had failed to reach the deficit cutting target agreed in the rescue package.

The Greek government has repeatedly warned of a potentially disastrous bankruptcy in November without the 8 billion euros.

However, analysts said that the newly approved loans would only serve the immediate financing need of Greece, while a second bailout package for Greece agreed by eurozone leaders at a summit on July 21 has yet to be implemented.