Brussels – Greece has received the final 15-billion-euro payment from its eight-year bailout programme in what creditors hailed as proof that tough austerity measures were “paying off”.
The payout by the European Stability Mechanism (ESM), the eurozone’s bailout fund, comes ahead of the formal end on August 20 of Greece’s third financial rescue package since 2010.
The cash landed after Eurozone finance ministers in June reached what Greek Prime Minister Alexis Tsipras called a “historic” deal to end the severe debt crisis that has weighed down the country for years.
“The last disbursement and the positive conclusion of the final review send out a message that Greece has come a long way during the three years of the ESM programme,” ESM Managing Director Klaus Regling said in a statement.
“The commitment and hard work of the Greek people are now paying off.”
Regling said the final set of reforms agreed by Greece in exchange for the last payout “included important actions in the field of tax policy, combatting tax evasion, public revenue reforms, and the resolution of non-performing loans.”
– ‘Last important step’ –
EU finance chief Pierre Moscovici tweeted on Monday that it was the “last important step towards the completion of the ESM programme on 20 August and to the new chapter that is about to open”.
“Greece now has a strong buffer to smooth its path back to market financing,” he added.
In total 9.5 billion euros ($11 billion) of the tranche will be used to build up Greece’s cash safety cushion to a hefty 24 billion euros — 22 months of Greece’s financing needs after the bailout ends — according to the ESM.
The other 5.5 billion euros will go on servicing debt.
Greece’s public finances spun out of control in 2010, sparking three international bailouts — the last was in 2015 — and threatening the country’s membership of the euro single currency.
In return Athens had to bow to harsh terms imposed by its creditors, especially Germany, with austerity measures and reforms striking at the heart of Greece’s bloated public sector.
EU countries with the highest levels of public debt (2017)
Announcing the deal to end the crisis in June, leftist premier Tsipras donned a tie for the first time since taking office, having pledged to wear one only when Greece’s debt was cut.
“The end of the ESM programme on 20 August will be a milestone for the country. Greece will now have to prove to its partners and the markets that it is committed to not reversing past reforms,” Regling said.
The Greek crisis was one of the biggest wobbles in the EU’s history, raising doubts about the sustainability of the postwar European project and boosting eurosceptic politicians who are now on the rise around the continent and helped push Britain towards the exit door in its 2016 referendum.