Business, Finance & Economics

IMF approves $37BN for Greek bailout


The EU and Greek flags fly in front of the Parthenon in Athens, Greece on February 17, 2012.


Oli Scarff

The International Monetary Fund (IMF) has approved a €28 billion ($36.6 billion) loan to Greece as part of a second €170 billion bailout after last week’s private debt swap.

The Washington-based lender said it would pay €1.65 billion immediately to Greece, Bloomberg reports. Its approval is the final step in completing the long-awaited rescue fund for the troubled euro zone state, designed to keep the country funded until 2014.

Greece has now received approval from all of the bodies contributing funds to the package. On Wednesday, Jean-Claude Juncker, head of the eurogroup of finance ministers, said all countries in the 17-member euro bloc had completed the necessary procedures to allow the flow of money to begin, the BBC reported.

The first instalment of €39.4 billion will be released in several tranches, Juncker said.

Greece has been surviving since May 2010 on a first bailout package worth €110 billion ($143.63 billion).

In return for both bailouts, Athens has been forced to impose stringent austerity measures to cut costs, repeatedly raising taxes while slashing salaries and pensions, according to the Associated Press.

On Monday Greece completed the world’s biggest ever sovereign-debt restructuring, swapping most of its privately held bonds with new securities worth less than half their original value.

The deal is designed to cut Greece’s national debt by $142 billion, bringing it down from 160 percent of GDP to a little over 120 percent of GDP by 2020.