Greek FinMin expresses satisfaction over Eurogroup decisions

Greek Finance Minister Yannis Stournaras expressed his satisfaction over the agreement reached during a Eurogroup meeting on Monday that paved the way for the disbursement of the next installments of aid to Greece, saying that disbursement of loans will continue normally in the next months, according to the funding programe.

Speaking to reporters after the meeting, the Finance Minister said disbursement of the next loan installment, worth 6.8 billion euros, will be made partially. In July, the country's creditors will disburse a tranche of 4.0 billion euros, of which 2.5 billion will come from EFSF and the remaining 1.5 billion euros from the return of earnings made through a Greek bond buy-back programe. A disbursement of an instalment of 1.8 billion euros from the IMF is expected in August, while the disbursement of an instalment of 1.0 billion euros is expected in October (500 million from EFSF and 500 million from a Greek bond buy-back programe).

The Greek minister noted that a precondition for the disbursement of the July instalment was for the Greek Parliament to have ratified by July 19 an omni-bill including a reform in tax administration, covering a fiscal gap and including privatizations and measures for the reform of the health sector and the financial sector.

Stournaras said that prior actions needed to be implemented by the end of September are four: restructuring of Hellenic Vehicle Industry (ELVO), Hellenic Defense Systems (EAS) and Larco, repayment of state debt to Athens Water (EYDAP) and Thessaloniki Water (EYATh), inclusion of 12,500 civil servants in a mobility programe and changes in the lawyers' code.

The Finance Minister said there were recommendations for the EFSF to disburse 4.8 billion euros to Greece - 1.8 billion more than the 3.0 billion euros approved - but these were rejected, as this action needed approval by national parliaments. Stournaras said that the issue could be discussed after October, but the exact sum would depend on the primary budget surplus to be presented by Greece.

Stournaras said the agreement reached between Greek authorities with the troika was "difficult" because of the political problem presented in Greece, adding however that the troika's assessment was positive for the country. He said that a fiscal gap created by problems in the health sector was closed, while a new agreement was reached with the troika over mobility of workers in the public sector.

The Finance Minister said the troika will respond in the next 10 days to a Greek demand for the reduction of VAT rate in the tourism/restaurant sector. If the answer is positive, the measure will be implemented from August 1, he added.

Commenting over a possible funding gap in the Greek programme, Stournaras dismissed such a possibility, although he noted that if a funding gap arose it would be dealt with by its creditors, if Greece continued meeting its obligations.