Eurozone agrees just half of €130bn bailout for Greece over reform fears
Eurozone member countries have approved just half of the €130bn bailout for Greece saying that Athens has yet to prove that it will meet all the terms and conditions required for the second bailout.
The remaining €71.5bn will be paid once officials from the European Union and IMF are happy that Greece is committed to implementing key measures aimed at putting the country back on a sound economic footing.
Athens has passed laws on fiscal consolidation, pension reform, financial sector regulation and structural reforms. It still has to issue some decrees and other ministry decisions that will translate the laws into action.
However, eurozone finance ministers did sign off on funds to underpin the debt swap aimed at cutting the value of the Greek bonds held by private investors.
The money can be paid out only after the completion of a bond swap between Athens and private investors which is to be concluded by March 9 and which aims to halve Greece's privately-held debt, cutting it by €100bn.
Jean-Claude Juncker, the Luxembourg prime minister who chairs the eurogroup, said Greece's official creditors would "finalise in the next few days" an assessment of Greece's steps to enshrine the bailout conditions into law.
"All required legislation by the parliament and the ministerial cabinet has been adopted and a few pending implementing acts should be completed shortly," Mr Juncker said in a statement.
The second financing programme for Greece, which follows a €110bn bailout agreed in May 2010, will total €130bn, plus €34.4bn of the undisbursed remainder of the first programme.
Heading into the finance ministers meeting, Ireland's Finance Minister Michael Noonan said the meeting would largely focus on Greece. "There will be a review of the prior agreement and there will be a review of how far they have implemented the requirements.
The ministers also agreed on a backstop facility for the recapitalisation of Greek banks. No figures were given but two euro officials said €23bn out of the €130bn was earmarked for that purpose. Another official said it could be as much as €40bn.