Greece secures €7.5bn aid payment from Eurozone

Eurozone finance ministers have approved the payment of around €7.5bn of aid to Greece.

The aid payment was given the green light at a meeting of the European Stability Mechanism in Luxembourg on Thursday and will allow the troubled nation to make its July loan repayments.

“This is a welcome breath of oxygen for the Greek economy,” European Economic and Monetary Affairs Commissioner Pierre Moscovici told reporters after the meeting.

The aid is part of the €86bn bailout that was agreed last year between Athens and international creditors in exchange for a series of economic overhauls.

The cash is due to be disbursed next week, meaning Greece will be able to meet debt repayment to the European Central Bank and the International Monetary Fund next month.

In addition, part of the aid will be used to repay domestic suppliers the government owes money to.

Capital Economics said that while the immediate risks surrounding Greece have receded once again, its analysis of the Eurogroup’s debt relief proposals “implies that they go nowhere near far enough to make the debt sustainable, suggesting that the long-term risks of default and Grexit are as high as ever”.

“We maintain our long-held view that the only realistic way to make Greek debt sustainable is to write off a large share of the official loans. But the Eurogroup has categorically ruled this out. If it upholds this stance, default and Eurozone exit will ultimately be the only viable path for Greece.”