THE NEW €174 billion bailout of Greece has cleared its last European hurdle after national and parliamentary approvals were completed in all euro zone countries, according to Jean-Claude Juncker, the Luxembourg prime minister who chairs the group of euro zone finance ministers.
The approval releases the first €39.4 billion in EU aid disbursements to Athens, much of which will be used for a rapid recapitalisation of Greece’s banking sector.
The sector saw a large portion of its capital base wiped out when its Greek sovereign bonds were slashed in value as part of the nation’s €206 billion debt restructuring.
Klaus Regling, head of the euro zone’s €440 billion rescue fund that will be disbursing the EU’s portion of the rescue, said the first payments would come in three monthly tranches, including €5.9 billion this month, €3.3 billion next month and €5.3 billion in May. After Greece’s banking sector is shored up, to include €48.8 billion in payments to the end of September, rescue payments were expected to resume their normal quarterly schedule, Mr Regling said. – Copyright The Financial Times Limited 2012