Greece Receives First EUR 20 B from Bailout

EUR 20B from the European Union and the International Monetary Fund (IMF) had been drawn on Tuesday for Greece, which is the first tranche of the EUR 110 B bailout. File Photo.

Greece has received the first tranche of the EUR 110 B bailout for the raging debt crisis in the country, BBC reports Tuesday, citing EU officials.

The European Commission informs EUR 20B – EUR 14.5 B from the European Union and EUR 5.5 B from the International Monetary Fund (IMF) had been already drawn on.

The loan was agreed earlier in May. In the aftermath, the European single currency fell to its lowest level against the dollar since 2006, amid concerns that debt problems will undermine Europe's recovery.

In return for the loan, the Greek cabinet vowed austerity measures aiming to achieve budget cuts of EUR 30 B in the next three years and reduce Greece's deficit to less than 3% of the Gross Domestic Product (GDP) by 2014 from the current 13.6%.

Some of the measures include: eliminating bonus payments for public sector workers, capping annual holiday bonuses and scrapping them all together for high-income employees, banning increases in public sector salaries and pensions for at least three years, increasing VAT from 21% to 23%, raising taxes on fuel, alcohol and tobacco by 10% and taxing illegal construction

The cuts triggered public outraged the public and a wave of protests, which led to violent clashes in the capital and 3 fatalities. Another 24-hour mass strike has been declared for May 20.

Also on Monday, Greek Deputy Tourism Minister, Angela Gerekou, known to be a political protegee of Prime Minister George Papandreou, was dismissed over revelations of tax evasion, showing her husband, a popular singer, owed more than EUR 5 M in unpaid taxes.

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