EU Agrees On Loan For Greece

The New York Times reports:

European finance ministers staved off an imminent Greek default Saturday, agreeing to release a vital installment of financial aid to Athens, while delaying a deal on a second large rescue for Greece, possibly until September.

After a two-hour conference call, the 17 euro zone ministers said they would sign off on an 8.7 billion euro ($12.6 billion) loan that had been expected as part of a 110 billion euro package agreed upon last year. The board of the International Monetary Fund is expected to approve its current contribution, 3.3 billion euros, in the coming days.

Without the loans, the Greek government faced the prospect of insolvency within weeks. The euro zone ministers’ decision followed two votes in Greece’s parliament to approve a tough austerity package, a condition for international assistance.

But, with Greece struggling to restore its finances, European finance ministers also need to put together a second package of loans to help it through 2014. This is expected to amount to 80 billion to 90 billion euros. Though that was discussed Saturday night, the ministers gave few details in a statement, and one official briefed on the talks but not authorized to speak publicly said that completing the new bailout would “not be easy.”

“They are going to have to work really hard, and we don’t expect an agreement before the next meeting of the euro zone ministers on July 11, and possibly not before September,” the official added.