The International Monetary Fund (IMF) today announced the approval of a $ 1.8 billion (1.6 billion euro) bridge loan for Greece, giving a boost to the rescue plan for the Greek economy.
The approval by the IMF Executive Committee of this “precautionary” credit agreement was announced this afternoon after two years of speculation as to whether the lender would participate in the Greek bailout program, one of the requirements that had been put by the partners and Creditors of Athens.
The contingency loan, which the IMF points out that it responds to a “principle of agreement” is equivalent to 1.3 billion special drawing rights (the nominal currency of the IMF), that is, 55 percent of the quota that Greece has in the Agency, stressed the institution.
In its brief statement, the IMF did not specify the requirements it will require Greece to disburse the loan.
The IMF has previously insisted on the need for the Greek bailout program to be accompanied by debt relief arrangements with Athens’ creditor countries.
The Greek authorities have expressed their intention to be able to re-access the international credit markets in 2018.
Today, European Central Bank (ECB) President Mario Draghi highlighted the “significant progress” made by Greece and, given the caution expressed by the Greek authorities, said that it is Athens who must decide whether to return to the capital market.
The ECB stopped accepting Greek debt as collateral in its refinancing operations in mid-February and since then Greek banks have relied on the more expensive emergency liquidity.
The financing of the Greek debt has become increasingly complicated because, given its magnitude, it is considered that in the end it will not be able to be paid in full without Athens agreeing to settle with its creditors.