Gov’t eyes tranche front­load­ing

Funds cashed in im­me­di­ately could reach 8.1 bil­lion eu­ros to cover the fi­nanc­ing gap up to mid-2014

Kathimerini English - - Front Page - BY SOTIRIS NIKAS

Pro­vided thatthe in­spec­tion of its stream­lin­ing pro­gram comes to a suc­cess­fully con­clu­sion, Greece can hope that the next bailout tranche will to­tal 8.1 bil­lion eu­ros, as the eu­ro­zone is ex­am­in­ing the op­tion of dis­burs­ing to Athens the in­stall­ments for the third and the fourth quar­ter of the year im­me­di­ately.

That way a ma­jor part of the fund­ing gap will be cov­ered, al­low­ing the In­ter­na­tional Mone­tary Fund to con­tinue to sup­port the Greek pro­gram as the fund­ing of the coun­try will be se­cured for the next 12 months. The eu­ro­zone ex­pects that this will ease IMF pres­sure for an im­me­di­ate hair­cut on Greece’s debt to the of­fi­cial sec­tor. Ac­cord­ing to sources, more than half of the to­tal 8.1 bil­lion eu­ros is the 4.2 bil­lion from the eu­ro­zone and the Euro­pean Cen­tral Bank. Of this, the amount of 3.1 bil­lion con­cerns the last cou­ple of in­stall­ments for 2013 (700 mil­lion for the third quar­ter and 2.4 bil­lion for the last). The other 1.1 bil­lion eu­ros con­cern the ECB’s prof­its from Greek bonds bought dur­ing the cri­sis to sup­port the Greek bonds mar­ket. This has al­ready been ap­proved on a po­lit­i­cal level and Athens is ex­pect­ing its dis­burse­ment.

An­other 1.8 bil­lion eu­ros will come from the IMF, which is the Fund’s share in the in­stall­ment for the sec­ond quar­ter of the year. An ad­di­tional 2.1 bil­lion eu­ros could come from the bonds bought by national cen­tral banks from the eu­ro­zone on the sec­ondary mar­ket.

With that 8.1 bil­lion, Greece would would be able to safe­guard the cov­er­age of its fund­ing gap not only for 2013 but also up to mid-2014. This short­fall was cre­ated by the ap­par­ent fail­ure to col­lect 2.6 bil­lion eu­ros from pri­va­ti­za­tion rev­enues and from the non-im­ple­men­ta­tion of the Eurogroup de­ci­sion for the post­pone­ment of pay­outs of ma­tured Greek state bonds that the national cen­tral banks had ac­quired be­fore the cri­sis erupted. The lat­ter was a de­ci­sion that was never ap­plied. Greece con­tin­ues to pay for the bonds that have ma­tured and the Eurogroup has not yet found a so­lu­tion to that prob­lem.

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