–Country also to get E5.5 billion from IMF tomorrow, official says

LONDON (MNI) – Greece is sending an application to the European
Commission today to formally request E14.5 billion in the first tranche
of aid under the EMU assistance package that was hammered out in April
and approved by Eurozone member states early this month, an official at
the Greek Finance Ministry confirmed.

The official also said Greece will be receiving as soon as tomorrow
an additional E5.5 billion from the International Monetary Fund. No
application is necessary for those funds, the official said.

The E20 billion total is nearly twice as much as an estimated E10.4
billion in Greek debt payments falling due between May 18 and May 20.
That amount includes bond redemption of E8.1 billion on May 19 and
coupon payments totaling E2.3 billion between May 18 and May 20.

The EMU plan provides for up to E80 billion in bilateral loans from
Eurozone member states over three years, of which some E30 billion is
expected to be disbursed in the first year. In tandem, the IMF has
agreed to put up E30 billion over the life of the plan, bringing the
three-year total to E110 billion.

This is separate from the E750 billion package agreed on Sunday by
the Eurozone, EU and IMF. Those funds, both loans and loan guarantees,
are intended to support other European countries that might run into
difficulties similar to Greece’s. The package includes a E440 billion
“special purpose vehicle,” which would provide loans and loan guarantees
from Eurozone states; an additional E60 billion for an already-existent
EU stabilization fund; and a matching E250 billion, if needed, from the
IMF.

But that support package is largely theoretical at this point,
since no country has yet asked for money from it and the Eurozone
special purpose vehicle has thus not yet been authorized to borrow for
that purpose — or even been approved, for that matter, by all the
relevant national governments or parliaments.

–London newsroom, Nick Shamim; nshamim@marketnews.com

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