Daily Management Review

Greece Might Still Need 'Bridge Funding' Despite Securing Bailout Package


Greece Might Still Need 'Bridge Funding' Despite Securing Bailout Package
Despite securing a bailout package on Tuesday, Greece might still need a bridge funding to meet the 20 August deadline for repayment of its debt to European Central Bank which would ensure that it remains within the European Union.

The first hurdle for Alexis Tsipras, the Greek Prime Minister, is opposition within his own ruling party to the austerity measures ‘slumped’ on Athens by the international creditors.

Local media in Athens reported on Wednesday that bailout programme is likely to be met by strong opposition from within Tsipras’s Syriza party and a ‘considerable’ number of Parliament Members belonging to the ruling party would oppose the proposed deal claiming that the conditions put for the bailout package were a betrayal of the party’s electoral pledges and would ultimately be a “noose around the neck” for the debt-stricken country.

The Greek parliament stated on Wednesday that the country’s MPs will hold an emergency session to ratify the text of the country’s new bailout programme soon, probably on Thursday.

There were however doubts expressed by a section of the European Press about whether the bailout package, agreed on Tuesday, would be ratified by the full support of all the European Union members.
Reports said that the parliamentary committees are expected to vote on the agreement clauses on the early hours of Friday after they discuss the bill on Thursday morning.

Alexis Tsipras is striving hard to get the bailout package passed in the Greek parliament which would ensure the country is not thrown out of the Eurozone and wants the parliament to approve a new €85bn (£61bn) bailout programme. This is the third such bailout package that the debt ridden country has managed to secure in the last five years.

The hurry for Tsipras to get the package passed in the Greek parliament is due to the fact that the Prime Minister wants to ensure he can get a thumbs-up for the package by Eurozone finance ministers who are slated to meet and vote on the package on Friday morning. This move would enable Greece to clear off the first repayment amount of €3.4billion to the European Central Bank which is due on 20 August.

However there were reports in newspaper across Europe about the reluctance of the German government to ratify the package. Germany had been the largest contributor to the previous bailout packages that were given to Athens.

“The Greek government’s greatest concern is that German finance minister, Wolfgang Schäuble, will reiterate his opposition to a deal and insist Greece should instead be granted a bridging loan,” the Greek newspaper Ekathimerini reported on Wednesday.

The report also stated that the German chancellor, Angela Merkel, had admitted to Tsipras that Germany was “sceptical” about the agreement.

AFP on the other hand reported on Wednesday that the Eurozone finance ministers are yet to reach a political agreement about ratification of the bailout package and this could delay the chances of Greece utilizing the bailout package to meet the August 20 deadline for repayment.
“We might need a few days’ bridging  funding,” a source was quoted as saying by the news agency. This also means that every member state has to approve the bridge loan as well.

(Source: www.businessinsider.com & www.reuters.com)