Next Aid Tranches Not Released Unless Mid-Term Program Adopted
With the approval of the Medium-Term Fiscal Program by the cabinet secured, Greek PM George Papandreou is attending EU Summit in Brussels on Thursday-Friday, at crucial meeting regarding the form of the second rescue package to Greece.
After the Greek government won its vote of confidence early on Wednesday with the support of all 155 ruling party MPs against 143 no votes and 2 abstentions, the Greek PM will be asked by his counterparts whether all 155 MPs will also vote for the mid-term package and the implementation law next week.
Diplomatic sources in Brussels note that European PMs “will encourage him to continue in the same direction, increasing the pressure”, as they believe that the voting in the Greek House should be made “with knowledge of the consequences if the law bill does not get the necessary majority”.
In other words, they are making clear that the next tranches of the 2010 bailout program won’t be released if the Greek Parliament doesn’t adopt the mid-term program.
However, several European Commission executives point out unofficially that Eurozone is not willing to risk the possibility of a Greek default, as this would have incalculable consequences in the European banking system due to the extensive impact of the debt crisis even on the central economies of the euro area.
At the same time, there is a growing talking about the final drafting of the new loan program, which includes about €110b in loans and €60b through privatizations and Greek bonds holding.
The new loan package of €110b would be set up by the remaining amount of the existing loan of €110b enhanced by new loans. As for the scheme of bond holding, it is estimated at €30-40b, depending on the terms.
Moreover, European Commission President Jose Manuel Barroso is expected to propose the acceleration of releasing of EU funds under cohesion policy in order to enhance the public investment program and stimulate growth.
(capital.gr)
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