IMF Rubber Stamps Greek Aid Package

March 15, 2012

Greece received good news for the second straight day on Thursday as the International Monetary Fund approved its share of an international rescue package for Athens also being funded by the European Union and its relief fund, the European Financial Stability Facility. Over the next four years, the IMF will give Greece 28 billion euros.

On Wednesday, euro-zone countries gave their nod of approval to the full 130 billion-euro ($169 billion) bailout that will keep Greece afloat until 2014, though the first tranche of aid is expected to be a fraction of that. The IMF said it would release 1.65 billion euros immediately.

“As agreed, new official financing of 130 billion euro will be committed by the euro area and the IMF for the period 2012-2014,” Jean-Claude Juncker, chairman of the group of euro zone finance ministers, said on Wednesday of the total package.

Greece has been unable to raise money on the international bond markets high because of high borrowing rates. Athens had completed a swap of privately-held bonds to cut its debts by more than 100 billion euros and taken other economic measures to help earn the EU-IMF deal. Greece’s debt is now expected to fall below a target of 120 percent of GDP to 117 percent by 2020.

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