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Greece Approved for 6.7 Billion-Euro Bailout Installment

Municipal contract workers protest outside the Greek Parliament demanding their contract renewals, in Athens, March 27, 2018. Bailout creditors want Greece to continue with austerity measures after the rescue program ends in August, in exchange tor better repayment terms. On March 27, Europe's bailout fund approved a 6.7 billion- euro ($8.32 billion) loan installment to Greece.

Europe's bailout fund on Tuesday approved a 6.7 billion-euro ($8.32 billion) loan installment to Greece as part of its third international rescue program, with payment of the first 5.7 billion euros expected this week.

The European Stability Mechanism said the approval came after the Greek government completed a series of required reforms. The funds will be used to service public debt and clear domestic arrears.

"Today's decision ... acknowledges the hard work by the Greek government and Greek people in completing an extensive set of reforms,'' said ESM head Klaus Regling. The reforms were in tax policy, privatizations and the resolution of nonperforming loans, among others.

The ESM said the initial 5.7 billion euros were to be disbursed Wednesday. The remaining 1 billion euros, to be used for clearing arrears, may be disbursed after May 1 if the country "makes progress in reducing its stock of arrears.''

Greece has depended on billions of euros from international rescue loans since 2010, and its third bailout is due to end this summer. In exchange for the money, successive governments have had to implement often painful economic and structural reforms, including tax increases and severe cuts to pensions and public spending.

Regling said he was "confident that Greece is on track to successfully exit the ESM program in August 2018, provided that the remaining reforms are implemented by the Greek government.''

Greece's financial crisis has wiped out a quarter of the economy and led to persistently high unemployment, which continues to hover above 20 percent. The frequently unpopular reforms have also led to street protests.