Eurozone to pay 40 to 50bn euros of Greek bailout
BRUSSELS, July 14
Eurozone governments will contribute between 40 and 50 billion euros ($44 to 55 billion) of the three-year bailout for Greece expected to cost of up to 86 billion euros, a European official said.
The International Monetary Fund (IMF) will contribute another major chunk, as the Washington-based lender is due to pay Athens 16 billion euros in a programme that is still running until March 2016.
The rest will come from profits from Greek privatisations and a return to the financial markets, the official said.
The European Stability Mechanism, the eurozone’s bailout fund set up during the financial crisis, will put ‘40 to 50 billion euros’ into Greece’s third bailout since 2010, the official said on condition of anonymity.
The new Greek bailout was agreed by leaders after a marathon 17-hour summit that ended early Monday.
Speaking on Monday, ESM Chief Klaus Regling said the IMF would commit to bailout once Greece had come up to date with two payments that it defaulted on this month worth two billion euros.
“They cannot make that commitment now because Greece is in arrears. But once that problem has been solved, the IMF will be there,” he said after the summit on Monday.
The rest of the cash is supposed to come from a controversial 50 billion euro privatisation fund mentioned in the bailout deal.
Half of the cash from the fund will go to recapitalise Greece’s shattered banks, while 12.5 billion euros is set to pay off debts.
Greece is also expected to make it back to the financial markets and raise its own cash independently, but no fixed date for this is set in the bailout terms.