June 20, 2011Blocked Greek loans should be released 'mid-July'
Luxembourg: Eurozone ministers said blocked loans due to bankruptcy-threatened Greece under last year's bailout should be freed up by "mid-July," as they wrapped up crunch talks moments before Asian markets opened Monday.
After seven hours of talks in Luxembourg kicking off a crunch week in which Europe is bidding to stave off the threat of a default that could wreak havoc with the shared euro currency, Athens will now receive the disputed 12-billion-euro fifth tranche once the Greek parliament passes a new austerity package.
Ministers also agreed that the critical second bailout for Greece, expected to top 100 billion euros once more, will see banks, pension funds and insurers invited to agree to "informal and voluntary rollovers" of existing debts years after their original redemption dates.
A report on Greek government compliance with the terms and conditions of the first bailout, "expected in the coming days," followed by Greek parliamentary backing for 28.4 billion euros ($40.6 billion) of fiscal belt-tightening and a host of privatisations will unlock the funds, a statement said.
Together, these "will pave the way for the next disbursement by mid-July."
Thereafter, the ministers agreed to "welcome the pursuit of voluntary private sector involvement in the form of informal and voluntary rollovers of existing Greek debt at maturity" to a "substantial" level.
The litmus test, they said, was that the volume of private sector contribution would be one "avoiding a selective default," meaning different ranking for different creditors, public and private.
"On these conditions, ministers decided to define by early July the main parameters of a clear new financing strategy."
European Union leaders are meeting in Brussels on Thursday and Friday, hoping to satisfy markets that they can nurse Greece back to long-term financial health and so ensure the euro's future stability.
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