EU calls on Greece to stick with reform plans

The European Commission has urged Greece to stick to commitments it has made to reform its economy as prime minister Alexis Tsipras called a snap election within hours of new EU bailout cash arriving in Athens.

EU calls on Greece to stick with reform plans

“It is crucial that Greece maintains its commitments to the eurozone,” said Dutch finance minister Jeroen Dijsselbloem, who as chair of his eurozone peers, led talks on a new €86bn facility agreed last Friday.

“I recall the broad support in the Greek parliament for the new programme and reform package and I hope the elections will lead to even more support in the new Greek parliament.

“Hopefully these elections will take place relatively soon so Greece can take important next steps in October, as foreseen.”

Brussels had been braced for an election since Tsipras won parliamentary support last week to fulfil eurozone lenders’ conditions only with opposition backing, following a revolt by nearly a third of parliament members from his left-wing Syriza party.

The new election, eight months after Tsipras swept to power on now-broken promises of ending lender-imposed austerity, injects renewed uncertainty into Greek policies. Some senior EU officials stressed that the vote could reinforce reforms.

“Swift elections in Greece can be a way to broaden support for ESM stability support programme,” said Martin Selmayr, chief of staff to commission president Jean-Claude Juncker.

Commission spokeswoman Annika Breidthardt said a new Greek government should stick to the loan terms in the memorandum of understanding signed with the European Stability Mechanism (ESM) late on Wednesday.

The ESM, backed by the governments of the 19 eurozone states, transferred €13bn to Greece yesterday, largely to pay off maturing debts to its ECB, EU, and IMF creditors.

It is the first installment of up to €86bn that lenders have agreed to provide Athens with over three years, if it meets conditions.

A further €10bn was set aside yesterday for a €25bn package to recapitalise Greek banks, part of the overall €86bn.

In all, €26bn us available to Athens in a first tranche of credit before its compliance with terms is reviewed in October.

Reuters

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