Bailout tranche received, ECB paid
The European Central Bank yesterday received a 3.2-billion-euro debt repayment from Greece, marking the fulfillment of Athens’s last significant obligation toward the ECB for the next 11 months.
“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 used bailout funds released earlier in the day to repay the bonds, held by the ECB and national central banks of eurozone countries. Greece’s next sizable bond repayment to the ECB falls due in July 2016.
Athens repaid the debt using money from the first installment of its new bailout after the program cleared its final hurdle on Wednesday night, with the European Stability Mechanism ap- proving the 86-billion-euro deal.
The aid deal comes after months of negotiations between Greece and its creditors that saw the country flirting with an exit from the euro area. Lawmakers in Germany and the Netherlands signed off on the plan Wednesday, after German Chancellor Angela Merkel and Dutch Prime Minister Mark Rutte fought off domestic opposition to push the bailout through.
The ESM transferred a first tranche of about 13 billion euros out of the 86-billion-euro program, the Brussels-based crisis fund said in statement.
The government will have about 1 billion euros of that first transfer available to shore up public finances after the rest is set aside for debt servicing and repayment of a 7.2-billion-euro bridge loan granted in July, the Finance Ministry said in a statement late Wednesday.
Another 10 billion euros will go into a segregated ESM account that is available for bank recapitalization.
The ECB’s banking supervision chair, Daniele Nouy, said yesterday that Greek banks will recover from the current crisis because they entered the turbulence relatively strong thanks to earlier reform efforts.
“Political events have of course weakened the banks, but the crisis did not start from the banks,” Nouy told Finnish broadcaster YLE. “I’m optimistic that the banks will recover because they have done so before.”
Greece’s banks were allocated a total of 25 billion euros in the bailout but will not receive the new capital until authorities complete their stress tests in October.