The Eurogroup finance ministers on Monday agreed to release 1.1 billion euro bailout loans to Greece and decided to delay the release of another 1.7 billion euros until later October because of a "technical issue".
"Important reforms have been undertaken on pensions, energy sector, bank governance, as well as on the setting up of the privatization fund and the revenue agency," said Jeroen Dijsselbloem, president of the Eurogroup, in a press conference in Luxembourg.
To get the money, Greece was necessary to complete 15 reforms, known as milestones in eurozone jargon, and should be assessed by four institutions, namely the European Commission, the European Central Bank(ECB), the euro zone bailout fund European Stability Mechanism (ESM) and the International Monetary Fund (IMF).
"All 15 remaining milestones had been completed," said Pierre Moscovici, the EU commissioner on economic and financial affairs, adding that Greece is on the right path.
The implementation of the milestones allows the ESM to approve the disbursement of 1.1 billion euros for Greece's debt servicing.
However, the release of another 1.7-billion-euro loans had to be delayed because of an "unavoidable data-collection" process, which is a "technical issue" but not a political decision.
"Once the relevant data for September becomes available and the institutions provide a positive assessment, the ESM Board of Directors is expected to approve the further release of 1.7 billion euros for arrears clearance," said Dijsselbloem.
In addition to the necessary data-collection step, according to Greek finance minister, Euclid Tsakalotos, the delay was also because that Greece did not have any imminent debt repayments.
The 1.1 billion euros are to be used for paying interest on debts, while the 1.7 billion euros are specifically for the clearance of arrears. Greece had secured a third bailout program of 86 billion euros in August last year, under which the creditors had disbursed 33.5 billion euros so far. The release the further tranche of 2.8 billion euros will mark the conclusion of the first review of the rescue program for Greece.
A second review may address the issue of debt restructuring, which IMF said is a necessary condition for itself to be involved in the rescue plan. According to the Organisation for Economic Co-operation and Development (OECD), Greek economy will expand in 2017 and "growth is projected to turn positive in the second half of 2016."
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