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Greece: ESM approved the disbursement of €2bn funds - ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 24, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - Analysts at ING Bank noted that the ESM approved the disbursement of €2bn funds for Greece and the next €1bn disbursement will require the completion of another set of milestones, which will include the divisive pension reform.

    Key Quotes:

    "The diminished parliamentary majority might make the relevant parliamentary passage a bit riskier.

    The board of directors of the ESM approved the disbursement of the €2bn bailout sub-tranche to Greece. According to the ESM press release, the sum will be used for debt servicing, for arrears clearance and for co-financing projects funded by EU structural funds. The €2bn is the second disbursement of the initial loan sub-tranche of the €16bn approved in August under the third bailout programme. The first disbursement, amounting to €13bn, had already been made in August.

    The timeline for meeting the second set of milestones will be, once again, very tight. President Dijsselbloem praised the Greek government’s commitment to implementing the second set of milestones and taking all decisions necessary to remove bottlenecks on key projects co-funded by the EU and the EIB by mid-December.

    In principle, incentives are still there for the Greek government to stick to its word and pass the relevant bill in the parliament. However, with the list of to-does including divisive issues such as the pension reform, the next parliamentary passage might prove riskier. Last week’s vote, which had paved the way for yesterday’s disbursement, was passed at a political cost. Two MPs, one from Syriza and the other from Independent Greeks, who had broken ranks voting no or abstaining, were ousted from the parties’ parliamentary groups, leaving the ruling coalition with a thin 3-seat margin in the Parliament. Some extra defections in the next round cannot be completely ruled out."
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