Greece bailout extended by four months
Bailout money must be used for the recapitalization of banks, not for government needs, says Eurogroup chairman

Greece agreed with its Eurozone partners on Friday to extend its bailout program by four months instead of six months as previously suggested.

Greek authorities are expected to present a first list of reform measures, based on the current arrangement by the end of this upcoming Monday.

''This list will be further specified and then agreed with the institutions by the end of April,'' Eurogroup said in a statement on Friday.

Greek government’s measures have to be paid for and be part of an approach which keeps economic recovery on track and which does not put fiscal sustainability in danger, according to Eurogroup chairman Jeroen Dijsselbloem.

Dijsselbloem told reporters on Friday that ''money must be made available for recapitalization of banks,'' not be used for government needs.

"Economic recovery cannot be put in danger, fiscal stability cannot be put in danger, financial sector stability cannot be put in danger,'' Dijsselbloem added.

"The request for an extension of the loan agreement was accepted in principle and is the basis for further decisions and developments," a Greek government official, who spoke on condition of anonymity, told the official Athens-Macedonian News Agency. "Greece has turned a page."

The source also said that attempts to trap and blackmail the Greek government ahead of the Feb. 28 deadline have failed.

The funds for Greek bank recapitalization will be released only on the request of the European Central Bank, according to Dijsselbloem. Almost €11 billion ($12.5 billion) in the Eurozone bailout fund is held by the Hellenic Financial Stability Fund.

Greek Finance Minister Yanis Varoufakis told reporters Friday: ''It was never our intention to use this money to fund the government. The very statement that money is there is another major boost to banking system.''

''I have no doubt that (no one) will imagine anything other than that the banking system is safe,'' Varoufakis added.

Varoufakis also said Friday: ''we combined two things I usually imagine to be contradictory -- we combined logic and ideology.''

''We will begin to be coauthors of our destiny of reforms we are going to implement and discuss with our partners,'' Varoufakis said.

Last Modified: 2015-02-21 10:29:28
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