Greece clears last hurdle to unlock EU-IMF bailout funds

Thu Jul 25, 2013 11:20am EDT
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ATHENS (Reuters) - Greece adopted on Thursday the last piece of legislation its international lenders required to release the next batch of rescue loans, ending two months of wrangling over unpopular measures to overhaul the economy.

Lawmakers convened during the parliamentary summer recess to approve a new tax code and put finishing touches to a controversial transfer scheme for civil servants.

The bill's passage will unlock 5.8 billion euros ($7.7 billion) of bailout funds from the euro area, its national central banks and the International Monetary Fund.

Cash-strapped Athens is expected to start receiving the funds from Monday. They include 2.5 billion euros from the euro zone's EFSF rescue fund, 1.5 billion euros of bond profit returns from euro zone central banks and another 1.8 billion euros from the IMF.

Subject to implementation of further reforms, Athens stands to receive another 1 billion euros in October.

Thursday's vote resolved the latest negotiation round between Athens and its lenders, which started in early June and stretched to the limit the cohesion of its shaky government.

Prime Minister Antonis Samaras's abrupt decision in June to shut down state broadcaster ERT to meet public sector dismissal targets caused the departure of a coalition ally, leaving him with a parliamentary majority of five seats.

The country's reform record has been patchy ever since its EU/IMF bailout started in mid-2010, leading to frequent delays in the disbursement of rescue funds.

The troika of international lenders will return in Athens in the autumn to find out whether the government needs to find further savings to meet its 2015-2016 budget targets.   Continued...

Tourists stand under a Greek flag atop the hill of the Acropolis in Athens July 3, 2013. REUTERS/Yorgos Karahalis