Tuesday 21 November 2017

Greeks make a €3.2bn payment to ECB with cash from bailout funds

Greek Prime Minister Alexis Tsipras talks to the President of Greece Prokopis Pavlopoulos at the Presidental Palace in Athens yesterday Photo: Getty
Greek Prime Minister Alexis Tsipras talks to the President of Greece Prokopis Pavlopoulos at the Presidental Palace in Athens yesterday Photo: Getty

Peter Flanagan and Yiannis Kourtoglou

Greece made a €3.2bn payment to the European Central Bank on a maturing government bond yesterday, doing so with cash from its first disbursement of new bailout money.

"The payment was made, the funds are on their way," a Greek official said.

The payment marked the fulfilment of Athens' last significant obligation towards the ECB for the next 11 months.

The ECB confirmed that it had received the payment.

"The ECB confirms that all Greek government bonds maturing today and owed to the ECB and Eurosystem national central bank have been repaid by Greece," the bank said.

Greece received the first tranche of funds from its new bailout loan on Thursday after the European Stability Mechanism had approved a rescue of up to €86bn on Wednesday.

The first tranche amounts to €13bn, of which about €12bn will be used to pay down debt, including an earlier bridge loan and the maturing Greek government bond held by the ECB.

The initial tranche was paid in cash. Another €10bn for the recapitalisation of banks was sent to a segregated account in the form of ESM notes.

Greece came close to the economic abyss and exit from the eurozone in late June as the prime minister, Alexis Tsipras, tried to extract concessions which the bloc's finance ministers refused to grant.

Mr Tsipras backed down last month, however, and accepted the new bailout and terms.

The aid deal came after months of negotiations between Greece and its creditor nations that saw the country flirting with an exit from the eurozone.

Lawmakers in Germany and the Netherlands signed off on the plan on Wednesday, after German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte had fought off domestic opposition to push the bailout through.

Germany, in particular, was reported to have been seeking a tougher deal for Greece in return for the bailout.

Irish Independent

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