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EU to allocate €35 billion interim loan to Greece

July 15, 2015, 15:35 UTC+3 BRUSSELS

The investment package for Greece will include €15 billion from the EU’s structural funds and another €20 billion redistributed from the European Union’s agrarian policy fund

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© AP Photo/Petros Giannakouris

BRUSSELS, July 15. /TASS/. The European Union has agreed a €35 billion investment package for Greece to stimulate the Greek economy’s development, European Commission Vice-President for the Euro and Social Dialog Valdis Dombrovskis said on Wednesday.

The investment package for Greece will include €15 billion from the EU’s structural funds and another €20 billion redistributed from the European Union’s agrarian policy fund, he said.

The investment package is designed for a period until 2020 and is not included in a program of macro-finance assistance to Greece, which the Eurogroup of finance ministers from eurozone countries is working out, Dombrovskis said.

At the same time, funds from the investment package will be allocated only if Greece stays in the euro area.

The European Commission published its forecast on Wednesday on the Greek economy’s development, following Athens’ request for a new financial assistance program.

Greek state debt

According to the EU’s forecast, Greece’s state debt is expected to fall to 165% of GDP by 2020 from the current 175%, if the Greek authorities implement all the reforms stipulated in an agreement with creditors.

The European Commission also said Greek debt restructuring was possible but only with regard to postponing debt payments instead of writing off a part of Athens’ liabilities.

The European Commission also said the main condition for Greece was to implement all the reforms agreed by international creditors.

The International Monetary Fund earlier published an estimate, under which the Greek state debt is expected to reach 170% by 2022. The fund’s experts also predicted this indicator to grow to 200% of GDP in the next two years.

The IMF, the eurozone Stability Facility and the European Central Bank have been providing financial assistance to Athens in the form of preferential loans for already five years.

Athens has received a total of €240 billion in financial aid by now. In return, the creditors actually demand the country’s placement under creditors’ "external management."

Under the previous aid packages for Greece, the Greek government was obliged to carry out structural reforms recommended by the international creditors.

Greece’s accumulated state debt amounts to €315 billion.

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