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Bailout Fund Approves Loan Installment to Greece

  • Associated Press

European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici (L) talks with Greek Finance Minister Euclid Tsakalotos (R) prior to an Eurogroup meeting on Nov. 23, 2015 at EU Headquarters in Brussels.

European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici (L) talks with Greek Finance Minister Euclid Tsakalotos (R) prior to an Eurogroup meeting on Nov. 23, 2015 at EU Headquarters in Brussels.

Greece was formally cleared on Monday to get its next bailout loan, worth 2 billion euros ($2.1 billion billion), after it agreed to take new austerity measures.

The eurozone bailout fund, the European Stability Mechanism, said it had agreed to release the next installment of the country's bailout program, following a 13 billion euro ($13.8 billion) payout in late August.

The approval was expected after Greece's parliament last week approved new austerity measures, which include higher taxes on wine and road use as well as more limited protection for distressed mortgage holders.

"If program implementation remains strong, I am confident that the Greek people's reform efforts will allow them to make visible strides toward a sound recovery,'' said ESM Managing Director Klaus Regling.

Opposition to the latest measures, however, cut the leftwing government's majority in parliament from five seats to three.

The government is racing to complete a bailout-supported recapitalization of its troubled banks before the end of the year and still faces a long list of more painful measures that include an overhaul of the national pension system.

Greece is expected to slip back into a mild recession next year, according to the 2016 budget submitted to parliament last week, while the national debt is set to climb higher, reaching 188 percent of annual economic output, or 327.6 billion euros ($347.6 billion).

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