More Money Sooner

Greek Prime Minister Alexis Tsipras arrives to welcome NATO Secretary General Jens Stoltenberg (not pictured) at the Maximos Mansion in Athens, Greece April 22, 2016. REUTERS/Alkis Konstantinidis
Pleased: Greek Prime Minister Alexis Tsipras would doubtless welcome extra funds that would mean less negotiation.
  • Why it matters

    Why it matters

    Giving Greece more money sooner might also mean skipping or postponing some of the progress reviews on Athens’ austerity measures and reforms.

  • Facts


    • In 2014, lenders reached an €85-billion ($95.2-billion) bailout deal for Greece in exchange for extensive reforms and austerity measures.
    • The parliament in Athens is due to vote on a series of tax increases and other measures on Sunday.
    • The International Monetary Fund has argued that Greece needs debt relief sooner rather than later, but critics, including Germany’s finance minister, do not want to let up on Athens.
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Greece is poised to receive up to double the amount of bailout money originally expected in international lenders’ next payout, Handelsblatt has learned.

Negotiators had initially planned to send €5.7 billion, or $6.38 billion, to Greece in the form of its next scheduled installment of aid money – from the third bailout deal meant to keep Athens solvent.

Now, those familiar with the talks among euro-zone finance ministers said Greece could get between €9 billion and €11 billion. E.U. diplomats told Handelsblatt that the sum is potentially enough cash to ensure that Greece can make it until almost the end of the year – and help it pay off the money it owes to companies.

A more generous tranche for Greece this time around would also give the country’s lenders some breathing room. Otherwise, the International Monetary Fund, European Union and European Central Bank would have to start negotiating the next bailout installment after this summer.

Giving Greece enough money to stay afloat through late 2016 would also give European negotiators one less thing to worry about before June’s Brexit vote.

Under the current agreement, those payments are contingent on the reforms that Athens undertakes, and the measures are scheduled for review every three months.

So far, however, negotiators have been busy wrangling over the first such progress report from last summer, a process that had been expected to end in October. European finance ministers have the chance to finalize the review when they meet in Brussels next week.

For his part, German Finance Minister Wolfgang Schäuble seemed optimistic about the prospects of a deal, saying the focus would be on “the successful conclusion of the program review.”

If that happens, E.U. diplomats and their counterparts at the IMF and ECB could greenlight payment of the next tranche – and agree to postpone talks on further examination of Greece’s reform progress, people familiar with the matter said, as well as talks over the next aid installment.

Giving Greece enough money to stay afloat through late 2016 would also give European negotiators one less thing to worry about before June’s Brexit vote, which will see voters in the United Kingdom cast ballots on whether the country should leave the European Union.

For Greece, there will be another key vote this Sunday. The country’s parliament is due to consider a package of tax hikes and reforms – the very measures Athens’s creditors have demanded to ensure that Greece meets the criteria of the bailout. The bailout deal, negotiated in 2014, is worth €85 billion.

On the matter of debt relief, however, Greece’s lenders are still at odds. Mr. Schäuble has stood firm on the issue, saying Athens must adhere to its debt payments to qualify for the bailout. Any relief, the German finance minister has maintained, should not come until after the conclusion of the program in 2018.

That has put him up against the IMF, which wants debt relief sooner. It also wants to cap interest on 40-year-loans to Greece at 1.5 percent – a proposal that has angered euro-zone countries.

The organization has threatened to end its involvement in the bailout program if the European Union fails to come up with a compromise. Mr. Schäuble is adamant that the IMF needs to stay on board, and a recent confidential letter to Germany’s parliamentary budget committee suggests that he may be willing to ease his stance on debt relief.


Ruth Berschens is Handelsblatt’s bureau chief in Brussels. Jan Hildebrand leads Handelsblatt’s financial policy coverage from Berlin and is deputy managing editor of Handelsblatt’s Berlin office. To contact the authors: and

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