ESM urges Greece to act fast on reforms to get new bailout loans in June
The European Stability Mechanism is ready to prepare the payout of vital bailout loans in June for crisis-hit Greece, but the country needs to "act swiftly" on bailout reforms, ESM Chief Economist Rolf Strauch said on Wednesday.
Strauch also said that Greece's European lenders will keep looking at ways to ease the country's debt burden, after eurozone finance ministers and the International Monetary Fund failed to reach agreement on debt relief last week.
"The ESM stands ready to prepare the disbursement once all the conditions are met," Strauch said during a conference in Athens. "It is not too late to unlock the disbursement in June. But Greece needs to act swiftly."
Greece needs about 7 billion euros in loans from its 86-billion euro rescue package to repay debt maturing in July, but the disbursement hinges on its lenders' assessment of its bailout progress, the conclusion of the so-called second review.
For the disbursement to take place, Greece needs to implement some 140 "prior actions" – laws that have to be passed to make the reforms stick. More than 100 of have been passed.
Greece adopted this month additional pension cuts and tax hikes, which will be implemented after its third bailout ends in 2018. In exchange, it hopes to get details on the debt relief measures that will be carried out after 2018, a move which will help it return to bond markets as early as this summer.
"Strong program ownership… is what Greece can do to put the country on a stronger footing. From our side, we will continue to look at the debt burden, because sustainable financing conditions are needed for Greece to regain investor confidence," Strauch said.
Germany, Europe's paymaster, believes the country must speed up reforms instead of getting significant debt relief.
It has sought IMF participation in Greece's current bailout program but the Washington-based Fund says it cannot contribute loans to Greece's current bailout unless it gets assurances that its debt will be sustainable.
Eurozone finance ministers will meet again on June 15.
"Europe has made abundantly clear that it will stand by Greece: today, tomorrow, and in the future," Strauch said.
[Reuters]
