Eurozone Won’t Release New Money For Greece Until Reforms Done

Eurozone finance ministers: Next tranche of loans for Greece only after Athens implements agreed reforms.

The eurozone will release the next tranche of loans for Greece as well as money for bank recapitalisation only after Athens implements agreed reforms, eurozone finance ministers said, noting a Greek pledge that the conditions would be met this week.

A European Central Bank stress test showed at the end of October that Greek banks needed a total of 14.4 billion euros in additional capital if they were to survive a scenario of adverse economic conditions.

Some of the needed total is likely to come from private investors, but the eurozone will have to provide the rest, using all or part of the 10 billion euros already earmarked for that purpose in the euro zone’s bailout fund.

The eurozone recapitalisation money is in the form of bonds of the eurozone bailout fund that can be transferred to the Hellenic Financial Stability Fund (HFSF), which would then hand them over to the banks.

We stand ready to support the disbursement of the 2 billion euros sub-tranche linked to the first set of milestones and the transfer to the HFSF of the funds needed for the recapitalisation of the Greek banking sector out of the 10 billion euros earmarked for this purpose, provided that the agreed conditionality is met

Eurozone Finance Ministers

Prime among the disagreements for the Greeks is the protection for poorer families in danger of losing their homes through foreclosure.

Eurogroup President Jeroen Dijsselbloem said passing the foreclosures law was key before banks could be recapitalised, because it had a direct impact on the number of bad loans that banks would have to deal with through recapitalisation.

But Greek officials note that repossessions are politically sensitive at a time when Athens is undertaking to provide food and housing for thousands of asylum-seekers under a plan to handle the European Union’s migration crisis.

Officials in the leftist-led government say a wave of evictions could boost support for the far-right Golden Dawn party.

There is also no agreement on the minimum prices of medicine and on a tax on private education, official said.

Greece is making considerable efforts. They are scrupulously respecting the July agreement. I want an agreement to be reached today. France wants an agreement today.

Michel Sapin, French Finance Minister