The Eurogroup unlocks the 8.5 billion euro bailout to Greece

Euro finance ministers closed an agreement last night to unlock a new Greek bailout payment. After months bordering the pact, European leaders agreed on the disbursement by agreeing to the latest round of cuts approved by Athens. Greece needed the new tranche of aid to meet important payment commitments in July.
Greece continues walking through the abyss without falling. Eurozone finance ministers blew out last night in Luxembourg to the specter of a suspension of payments by releasing funds from the bailout to Greece, which faces major debt maturities in July. The unlocking of the $ 8.5 billion was expected after Athens approved a new round of austerity measures in areas as sensitive as pensions. Of the agreed aid tranche, 7.7 billion will be delivered in early July and the remainder after the summer. The pact prevents the problem from being postponed until the summit of heads of state next week in Brussels and removes the uncertainties linked to the third Greek bailout.

The International Monetary Fund's managing director, Christine Lagarde, also announced that she will propose to the board of the institution to participate in the current rescue plan with up to $ 2 billion, but its demands have not changed: it continues to condition aid to relief the effective debt. "There has been clear progress but the IMF believes that more needs to be done and that partners need more time to complete the process of identifying debt measures," Lagarde said.

The final decision on the restructuring will have to wait in principle until the end of the program in mid-2018. The future of Greece is hostage to the German electoral calendar. The search for solutions is easier to see once the September elections, which limit Berlin's ability to move to join unpopular relief measures among a section of its constituency, have become easier. The Eurogroup nevertheless gave some clues. In the words of its president, Jeroen Dijsselbloem, the agency "is ready to implement an extension of the average maturities and a delay of amortization interest of between 0 and 15 years." In the drawer was the French proposal to link the amount of debt relief to GDP growth.

The disbursement agreement fled the usual marathon days. The meeting lasted only two hours and since their arrival, Finance officials were confident in unraveling the situation after the last stumbling block at the meeting last month in Brussels. The optimistic message acquired the category of mantra. "An agreement is not only within reach, it is necessary and indispensable," said Commissioner for Economic Affairs Pierre Moscovici. "I am confident that we will reach an agreement on the payment of the next tranche," said German Wolfgang Schäuble. The most graphic was the Slovak Peter Kazimir: "Congratulations to Tsakalotos for all the work done. He is going to return home with a suitcase full of money, "he said in his Twitter account referring to the head of Finance heleno giving by fact the approval to the delivery of money.

Given the precedents, the optimism that distilled the European leaders needed the confirmation by the way of the facts. The disbursement will allow to release new loans from the third rescue program, with 86,000 million euros, of which 31,700 million have already been paid. But above all, take away the ghost of a summer moved flirting with the default. "After months of debate we have reached an agreement that will allow Greece to turn the page to this very difficult period for the Greek people," Moscovici said.

A long way

The rhetoric was triumphant after thawing the bailout, but until it is determined what kind of restructuring is willing to allow Europe, the feeling is to patch patch to save time. Economic indicators in Athens have improved in recent times. The primary surplus, not counting interest on the debt repayment, has surprised us favorably. And although growth data for the last two quarters have been negative, on paper, the numbers should turn around: Brussels expects this to be the year of a return to robust GDP growth following its relapse into recession. The road to something similar to normality is nevertheless tough: unemployment has been over 20%, the country has lost 25% of its wealth since 2010 and the mountain of Greek debt, close to 180% of GDP and repeatedly classified as unpayable by the IMF, totals 314,000 million euros, equivalent to four times the spending of tourists who visited Spain last year.

In the most distressing moments of its debt crisis, Greece had to decide between one misfortune or another: to remain in the euro and assume the inaca