Greece has secured a crucial €4.8bn (£4.1bn) payment in its bailout package on the condition it implements further austerity measures in the coming weeks.
Eurozone finance ministers last night agreed to release the country’s third-quarter bailout instalment but broke it down into three “disbursements” that are conditional on the government carrying out reforms.
The funding should be sufficient to prevent Prime Minister Antonis Samaras’ government from going bankrupt and being forced out of the euro, but is strict enough to avoid creating another debt-crisis showdown before the German elections in September.
The first €2.5bn from the eurozone will arrive in 10 days on 19 July, if Greece completes the “full implementation of the prior actions” – which includes deeper spending cuts and public sector lay-offs.
A statement from the Eurogroup says: “Significant further work is needed over the next weeks to fully implement all prior actions required for the next disbursement.
“Especially, the required reforms of the public administration will need to be carried out so as to increase the efficiency of the public sector while it is being steadily downsized, and further efforts are needed to improve tax revenue collection.”
The International Monetary Fund will pay the second instalment of €1.8bn in August while the eurozone will release another €500m in October, which is linked to administrative reform and privatisation targets.
German finance minister Wolfgang Schaeuble told Bloomberg: “Greece is on the right track in many ways, but there have been delays in some areas. It is right to proceed on a cash-on-delivery basis and step by step and make the disbursements as Greece’s financing needs arise.”