European Rescue Fund Agrees To Give Greece 5 Billion Euros

By Alberto Riva | May 09 2012 2:33 PM

The European Financial Stability Facility, the entity set up by euro zone countries to provide emergency funds for member nations in crisis, agreed Wednesday to issue a payment of 5.2 billion euros ($6.7 billion) to Greece.

REUTERS

Greece will have to slash a further 5.5 percent of GDP in government spending in 2013 and 2014 to meet agreed fiscal targets underpinning the second international bailout for Athens, a European Commission report said.

Sponsorship Link

Reuters reported that the board of the EFSF, which includes representatives for each of the 17 euro zone nations, voted for releasing the funds despite opposition from some members concerned with the current political instability in Greece.

Without the EFSF money, Greece would have had trouble meeting its obligations, including paying its government workers and creditors. The country has 435 million euros' worth of bonds maturing next Tuesday.

The payment from the EFSF was due Wednesday.

During the board's meeting in Brussels, a spokesman for Eurogroup President Jean Claude Juncker told reporters that normally, the payment is due, since legally, nothing has changed in Greece. But I can't exclude that some people may have second thoughts about it, Dow Jones News reported.

The payment is the last of the instalments agreed to in March by the Eurogroup as part of the 130 billion euro second bailout program, the news agency said.