BERLIN (MNI) – German Chancellor Angela Merkel said Thursday she
hoped the Eurogroup would approve today the payment of the next tranche
of fiscal aid to Greece, stressing that the country urgently needs the
money.

In a declaration in the Bundestag, the lower house of parliament,
Merkel said the Greek debt buyback program “was an important
contribution to improve debt sustainability.”

The chancellor thanked the budget committee of the Bundestag for
empowering Finance Minister Wolfgang Schaeuble to vote for the payment
to Greece at the Eurogroup meeting.

“Thereby, Germany has cleared the way and I hope that the Eurogroup
will also approve the payment,” Merkel said. “It is urgently necessary
that the state can pay its bills and that the banks can be recapitalized
so they can hand out loans to businesses again.”

The Eurogroup plans to disburse a E34.3 billion loan tranche to
Greece this month. This figure includes E16.0 billion for bank
recapitalisation and resolution, E11.3 billion for the debt buy-back –
up from the originally approved figure of E10 billion – and E7.0 billion
for the budget.

In the first quarter of next year, the Eurogroup foresees another
E14.8 billion payment to Greece, comprised of E7.2 billion for bank
recapitalisation and resolution and E7.6 billion for the budget. The
budget tranche will be paid out in three steps: E2.0 billion in January,
E2.8 billion in February and E2.8 billion in March.

Merkel praised the reform efforts undertaken by Greece. “On this
basis it will be possible to return to growth and achieve an improvement
of the situation on the labor market and of the living conditions of the
people,” she reckoned.

The chancellor reaffirmed the mantra of her government: “Structural
reforms which lead to more competitiveness are the right answer to the
crisis.” Merkel said she was convinced that Europe would emerge stronger
from the crisis.

“The efforts weren’t for nothing, the reforms are showing first
success,” the chancellor argued, noting that in all crisis countries the
current account deficits had been significantly reduced and unit labor
costs had fallen.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@mni-news.com

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