The International Monetary Fund agreed to disburse 3.2 billion euros ($4.3 billion) to Greece after the country made new budget cuts, received more favorable aid terms from European nations and conducted a bond buyback.
The IMF board made the decision during a meeting today, it said in a press statement. The funds are part of a joint 130 billion-euro package with European nations, which unblocked their share last month.
“The situation on the Greek front is improving,” Thomas Costerg, an economist at Standard Chartered in London, said in an e-mail. “This said, the situation remains fragile, and despite the buyback Greece’s huge debt is still an issue.”
The loan had been frozen since June as a recession and domestic opposition to the program drove Greece away from measures agreed to just three months earlier.
While European policy makers now turn their attention to reviving growth in the 17-country monetary zone and to bailing out Cyprus, Greece may yet again creep back on their agenda. The government has to deliver on its commitments to earn each future payout and European finance ministers committed to “additional measures” if the country’s debt reduction veers off track.
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