Greece receives EU funds but faces huge task ahead

City A.M. Reporter
GREECE received a €14.5bn (£12.4bn) loan from the European Union yesterday and can now repay its immediate debt, but still faces a mammoth task to claw its way out of recession.

Concerns that other EU countries such as Portugal and Spain could follow Greece and need aid from the bloc have hit the euro, while investors are still watching Athens to see whether its austerity plan will stave off the prospect of default.

The EU and IMF agreed at the beginning of the month to lend Greece €110bn over three years to help it pay billions in expiring debt after being shut out of financial markets by the high cost of borrowing.

With €5.5bn already delivered by the IMF, Greece has now received the first €20bn tranche of the loans, the Greek finance ministry said. Athens now can and will repay an €8.5bn 10-year euro bond which matures today, a government official said. “Greece no longer has the liquidity anxiety, it will not need to go to markets to borrow to pay salaries and pensions,” said Gikas Hardouvelis at EFG Eurobank.