The European Stability Mechanism (ESM) is positive to the prospect of thrice bailed-out Greece paying off loans extended to the country by the IMF, the emergency fund’s managing director, Klaus Regling, announced in Brussels on Friday, immediately after the Eurogroup approved a 970-million-euro tranche to Athens.
The money to flow into Greek state coffers is part of roughly 4.8 billion euros in profits generated by Greek bonds held by the European Central Bank and Eurozone member-states’ central banks as collateral for bailout loans extended to Athens.
Regling said it would be “wise” for Greece to pay off the IMF loans before their maturity ends, as the latter field a higher interest rate.
The finance ministers of Eurozone member-states participating at the Eurogroup, as expected, signed off on the tranche for Athens, while at the same time emphasizing the need for the Tsipras government to continue reforms in the country.
Foot-dragging by the hard left government, especially delays in finally presenting and legislating a successor framework for protection of primary residences in the country from creditors, were judged as blocking the release of the money. The return of profits from Greek bonds is one of the more prominent debt relief measures allocated by European creditors in 2017, in return for a veritable “tax tsunami” unleashed by the Tsipras government in order to meeting high fiscal targets.
