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Eurogroup Rules Out New Bailout Program for Greece

BRUSSELS (Sputnik) - Eurogroup President Mario Centeno announced in the early hours of Friday that Greece had completed the eight-year ESM assistance program and would no longer need bailout money.
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"Today the institutions confirm Greece as implemented all the 88 prior actions and the fourth and final review. This shows Greece as successfully completed its ESM program. This is it… There will be no follow-up program in Greece," he told reporters.

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He praised international creditors for delivering a "soft landing" for Greece, disbursing a total of 240 billion euros ($278.7 billion) in cash at low interest rates over the span of three ESM programs.

Greece, he said, will now join Ireland, Spain, Cyprus and Portugal in the ranks of eurozone countries that once again "stand on their own feet," in return for long-term budget and reform commitments.

Centeno also announced a debt relief package to safeguard Greece’s debt sustainability, including a 10-year extension on loans by the European Financial Stability Facility (EFSF), the eurozone's temporary crisis fund, and a 10-year deferral on interest.

Greece has taken on massive debt while battling an economic crisis through austerity measures since 2010. In 2015, Greece's international creditors — the European Commission, the European Central Bank and the International Monetary Fund — signed an agreement with Athens approving a third bailout package worth some 86 billion euros in exchange for austerity reforms, which include pension cuts and tax hikes.

Athens and its international creditors reached a deal in the early hours of Friday on the last tranche of bailout cash that will ease the south EU nation’s debt burden, the Eurogroup said.

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The deal was first announced by Eurogroup President Mario Centeno upon the completion of the fourth and final review of the Greek austerity program. Under it, the European Stability Mechanism (ESM) will disburse a final tranche to Greece of roughly $17.4 billion.

"The ESM governing bodies are expected to approve the disbursement of the fifth and last tranche of the ESM programme amounting to EUR 15 bn," lenders said.

Out of this total, 5.5 billion euros will be disbursed to the segregated account to be used for debt servicing, while 9.5 billion will be disbursed to a dedicated account set up to build up cash buffers.

"Overall, Greece will be leaving the programme with a sizeable cash buffer of EUR 24.1 bn covering the sovereign financial needs for around 22 months following the end of the programme in August 2018, which represents a significant backstop against any risks," the statement continued.

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