Certainty over ESM’s approval

Board meeting to approve today the disbursement of 7.7 bln euros to Greece, as Athens prepares letter to IMF

A top eurozone official in Brussels and a senior Finance Ministry source in Athens expressed certainty yesterday that the board of the European Stability Mechanism will issue its approval today for the disbursement of the 7.7-billion-euro tranche to Greece. Also today or in the next few days Athens will send a request to the In- ternational Monetary Fund for it to participate in the bailout program.

“I am certain that in tomorrow’s conference call of the ESM board the issues that were open will be considered fulfilled,” the eurozone official said yesterday, adding that they are “small matters that can be easily fulfilled.” Likewise the ministry source noted they are details of a technical nature that were settled yesterday, one by one, via conference call.

“I am not interested in the possi- bilities of defeat; they do not exist,” the eurozone official said using a quote attributed to Queen Victoria to show his certainty of a positive outcome today. Referring to this coming Monday’s Eurogroup meeting, he laughed that “this will be the first Eurogroup after many meetings without Greece on its agenda.”

The ministry source also said that very soon, possibly even today, the government will send the IMF a letter of intent asking the Fund to partici- pate in the Greek program. The letter will be signed by the prime minister, the finance minster and the central bank chief. The IMF board will decide by July 27.

According to a document published by the ESM yesterday the precise date of the 7.7-billion-euro disbursement remains open, with a deadline set for July 31.

Greece is facing numerous large payments in the next few weeks. In 10 days’ time it must pay 2 billion eu- 843.25 +1.1385 ros to private bondholders, on July 18 290 million is due to the IMF and on July 20 Athens must pay 4 billion euros to the European Central Bank.

Of that 7.7 billion euros, 6.9 billion will be used for servicing the state debt and 800 million will be placed in a separate account for the repayment of state dues to suppliers and taxpayers – but only provided that Greece has used 80 percent of the 1.8billion-euro tranche paid last year to cover similar dues to third parties.