Cyprus Mail
Greece

EU Commission ready to release grants to Greece

A child dressed as a Greek Presidential Guard attends a military parade marking Greece's Independence Day in front of the parliament building in Athens, Greece

Greece has respected its commitments under a post-bailout programme, the European Commission said on Wednesday, paving the way for Athens to receive nearly 1 billion euros ($1.1 billion) in new grants.

The release of funds, which needs to be endorsed by euro zone finance ministers at a meeting on Friday, would boost Greece’s already large cash buffers and could allow the country to borrow at more favourable rates.

Greece exited its last bailout in August after eight years of financial support from euro zone creditors and the International Monetary Fund. It has already successfully tapped financial markets again.

The funds, the first instalment of a post-bailout programme, should have been released earlier, but the payment was delayed because creditors said Athens had not executed required reforms by the end of last year.

The Commission’s positive assessment on Wednesday followed the Greek Parliament’s approval last week of a reform to facilitate banks’ recovery of debt that goes bad, a move that is expected to reduce the large burden of non-performing loans on Greek lenders’ balance sheets

The nearly 1-billion-euro grants that could be approved this week would be the first disbursement from a package of 4.8 billion euros that euro zone creditors have pledged to Greece until 2022 as part of the post-bailout programme, which requires Athens to continue reforms.

The money partly comes from profits made by euro zone central banks on their holdings of Greek bonds that will gradually mature over the coming years.

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