Europe Transfers First Intallment of 14.5 Billion EUR to Greece

The European Union transferred €14.5 billion to Greece on Tuesday, the first installment of E.U. funds under the rescue package worked out by the European Union and the International Monetary Fund, a commission official said.

Photo: Europe Transfers First Intallment of 14.5 Billion EUR to Greece

The EU transfer, equivalent to about $18 billion, comes atop €5.5 billion Greece received last week from the IMF. The disbursements will help the country to refinance nearly €9 billion of loans maturing Wednesday, New York Times says.

Euro-area ministers and the IMF agreed on May 2 to a 110 billion-euro aid package for the debt-stricken nation. Greece pledged to implement austerity measures of almost 14 percent of gross domestic product in exchange for the rescue funds that EU officials hoped would stem declines in the euro.

The initial bailout failed to stem the slide in the euro and end the decline in bonds of other high-deficit nations such as Spain and Portugal. EU leaders on May 9 agreed to a financial lifeline of almost $1 trillion to try to stop the contagion. The euro was little changed today at $1.2402 after reaching a four- year low of $1.2235 yesterday, BusinessWeek informs.