BRUSSELS (Sputnik) — The Eurogroup approved on Friday an €86 billion ($93 billion) bailout package aimed at rebuilding Greece's ailing economy.
Earlier in the day, Greece's parliament approved the corresponding aid package, just hours before the crucial Eurogroup meeting was due to start.
"Based on the assessment of the Institutions, the ESM financial assistance facility agreement will cover an amount of up to EUR 86 bln. This includes a buffer of up to EUR 25 bln for the banking sector in order to address potential bank recapitalization and resolution costs," the Eurogroup said in a statement following a meeting of finance ministers of the 19-nation euro single currency group.
According to the statement, the first tranche of €26 billion under the ESM program will consist of two sub-tranches. The first sub-tranche of 10 billion will be made available immediately in a segregated account at the ESM for bank recapitalization and resolution purposes.
The second sub-tranche of €16 billion will be disbursed to Greece in several installments, starting with a first disbursement of €13 billion by August 20, the statement said.
The Eurogroup praised Greece for taking "decisive measures to safeguard stability, including a recapitalization of the banks as required, measures to enhance the insolvency framework and a significant improvement of the governance of the banks and the Hellenic Financial Stability Fund (HFSF)."
The wide scope of the required measures will address the main challenges the Greek economy is facing "if implemented with determination," according to the statement.
On July 13, eurozone leaders agreed on a new bailout plan for Athens that would guarantee the country some $93 billion over the next three years in exchange for strict austerity measures. Shortly after reaching the agreement, Athens and its lenders from eurozone countries, the ECB and the International Monetary Fund (IMF) launched negotiations on the third aid package.