LUXEMBOURG (MNI) – Eurozone finance ministers on Thursday night
agreed to release E1 billion of aid for Greece that had previously been
withheld and said that inspectors from the European Commission, European
Central Bank, and IMF would go to Athens on Monday to investigate how
far Greece has fallen behind in implementing reforms.

“We are in an urgent situation and all the procedures have to be
speeded up,” said Jean-Claude Juncker, who heads the Eurogroup of
Eurozone finance ministers.

A team of officials from the three institutions tasked with
overseeing Greece’s compliance with the terms of its EU-IMF bailout will
first “take stock” of the situation. After they report their findings, a
“full mission” would be sent to work on an “updated” memorandum of
understanding, outlining what Greece’s bailout backers expect the
country to do.

Although the finance ministers agreed that the EU’s bailout fund,
the European Financial Stability Facility, would disburse E1 billion of
previously approved but withheld aid, Greece would have to fulfill a
list of “prior commitments” before future disbursements were made.

Part of the E1 billion of aid released would flow directly back to
the EU, as Greece will use the money to pay part of its share of the
capital of the Eurozone’s permanent bailout fund, the European Stability
Mechanism, which is expected to start operations in July, Juncker said.

Greece is expected to contribute about E1.57 billion to the ESM’s
E80 billion of paid-in capital.

Eurozone governments acknowledge that the terms of Greece’s bailout
deal need to be adjusted to keep them in line with the reality of a
deteriorating economic situation, but they are divided over the extent
of changes they are prepared to accept, with some adamantly opposed to
any changes that would raise the cost of the bailout.

Pierre Moscovici, France’s new Socialist finance minister, said
that France favored “flexibility” toward Greece, respecting the wishes
of the Greek people.

–Brussels Bureau, +324-952-28374; pkoh@marketnews.com

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