2016.05.1606:50:00UTC+00Eurogroup Likely to Release Next Tranche of Loan to Greece on may 24

The Eurogroup is expected to release the next tranche of loan to Greece on May 24, conditional upon the timely approval by the Hellenic parliament of a multi-bill containing the legislation for the implementation of the remaining prior actions attached to the 1st program review, reports said.

According to information revealed by the Eurobank, the amount of loan is equivalent to a sum of EUR 5.4 billion, solely for the coverage of debt interest and payment of amortization. Additionally, the debt-ridden nation would be granted another EUR 3-5 billion for the purpose of clearing state arrears. The latter amount will be released in different phases, subject to certain conditions.

A divergence of views continues to exist between European creditors and the IMF with the latter calling for imminent and drastic debt relief to secure debt sustainability, Eurobank reported.

"The aim at the upcoming Eurogroup is for European creditors and the IMF to agree on a specified debt “road map” so as to ensure the Fund’s financial participation in the program," said European Commission Vice President Valdis Dombrovskis.

Meanwhile, Greece Prime Minister Alexis Tsipras said that a successful deal on the nation’s debt problems at the May 24th Eurogroup would ensure Greece’s return to the debt market within a year, ahead of the expiration of the program in August 2018.

"Debt talks should include a lower primary fiscal target after 2018 from 3.5%-of-GDP to 2.0%-of-GDP," said Bank of Greece Governor Yannis Stournaras.

The Central Bank Governor also mentioned that a successful conclusion of the review would lead to the gradual return of bank deposits and the re-introduction of Greek collateral waiver, adding that the latter along with Greece’s participation in the ECB’s QE program would have a positive impact of EUR 400 – EUR 500 million on Greek bank results in 2017, Eurobank reported in a research piece.