(Adds statement from IMF’s Lagarde)
BRUSSELS, Dec 13 (Reuters) - Euro zone finance ministers and officials approved releasing the next payment of aid to Greece at a meeting in Brussels on Thursday.
They also made progress towards an assistance programme for Cyprus.
Following are comments after the talks:
STATEMENT BY IMF MANAGING DIRECTOR CHRISTINE LAGARDE (WHO JOINED THE DISCUSSIONS BY TELECONFERENCE)
”I welcome the Eurogroup’s decision to support the debt buyback operation for Greece and its assurances to provide additional debt relief if necessary and provided Greece has achieved a primary budget balance in 2013.
”These steps will ensure that Greece’s debt-to-GDP declines to 124 percent by 2020 and to substantially below 110 percent by 2022.
“On this basis, I intend to recommend to the Fund’s Executive Board that it completes the first review of Greece’s Fund-supported program. I expect that a board meeting could take place in January.”
“I don’t want to draw up a picture which would be an alarming one. The problem of Cyprus is serious and we are tackling this problem in a serious way.”
HAVE YOU DISCUSSED POSSIBILITY OF PRIVATE SECTOR INVOLVEMENT WITH CYPRUS?
“I am still alive. I will talk to (EU Council) President Van Rompuy today and then all the initiatives needed will be taken.”
ASKED ABOUT POSSIBILITY OF A DECISION ON CYPRUS BY MID-JANUARY?
“I don’t want to lock us into an overly strict timetable. But we will work to find a solution as quickly as possible.”
“We consider that progress has been made towards a possible... financial assistance programme for Cyprus.”
“We welcome that the Cypriot authorities have demonstrated their commitment to further reforms.”
“We are convinced that the programme is back on a sound track.”
“We are ready to take different measures so that it stays that way, providing Greece has stuck to its commitments.”
“Money will be flowing to Greece as early as next week.”
“(IMF Managing Director) Christine Lagarde participated today in the meeting via telephone conference call facilities. And we of course have been in close contact with her ... in order to finalise this agreement.”
”After the approval by the Eurogroup today, the EFSF is prepared to make available to Greece 49.1 billion euros between now and the end of March.
“Within this envelope of 49.1 billion between now and the end of March, we will disburse immediately in the next few days 34.3 billion. This has three elements... 16 billion euro for the bank recapitalisation and bank resolution, 7 billion for budgetary financing and 11.3 billion euro to finance the debt buyback.”
”The journey now starts. It’s about what we expected, taking into account the cost of the buyback.
“We now have to implement many changes which are for the benefit of the Greek economy.”
”The Eurogroup welcomed the result of the debt buyback operation, which will lead to a substantial reduction of the Greek debt-to-GDP ratio.
”The Eurogroup reaffirmed that this, together with the initiatives agreed by the Eurogroup on Nov. 27 and full implementation of the adjustment programme, should bring Greece’s public debt back on a sustainable path, to 124 percent of GDP in 2020.
”Greece and the other euro area member states are prepared to take additional measures, if necessary, to ensure that this objective is met.
”On that basis, member states have authorised the EFSF (bailout fund) to release the next instalment for a total amount of 49.1 billion euros.
”The disbursement will be made in several tranches, 34.3 billion euros will be paid out to Greece in the following days. The remaining amount will be disbursed in the first quarter of 2013.
”First, a further amount to cover bank recapitalisation and resolution costs will be paid out in January 2013.
”Second, funds to cover budgetary financing will be disbursed in three sub-tranches, linked to the implementation of specific memorandum of understanding milestones to be agreed by the troika.
”The Eurogroup is convinced that continued fiscal and structural reforms, building on the strong commitment demonstrated in the recent past and the wide range of reforms already carried out, will allow the Greek economy to return to a sustainable growth path with higher employment, thus paving the way towards a more prosperous future.
“We strongly encourage the Greek citizens to sustain their efforts and to implement the necessary reforms.”
”We took note of the interim results of the due diligence exercise on the capital needs of the Cypriot financial sector, whose main preferences were broadly in line with expectations underlying programme discussions.
“The final results are expected in the middle of January. We are assured that Cyprus’s immediate financing needs have been covered.”
Following are earlier comments from ministers and officials ahead of the talks:
”I have good hopes... that we will be able to take the right decisions for Greece and release 43 billion euros in aid, so that this country, which has undertaken important reforms, can follow through with them.
”We consider that the debt buyback has produced the desired effect. We are on the right path. The programme will be respected, its financing is assured.
“I think we can have the right decision to disburse the aid to Greece.”
“I don’t think that we can find a definitive solution for Cyprus today. It will probably be done in January.”
ASKED ABOUT THE GREEK DEBT BUYBACK FALLING SHORT AND WHETHER FUNDS COULD BE FREED UP FOR GREECE:
“I‘m confident we will find a way.”
“Today’s decision will remove the clouds hanging over Greece.” (Reporting by Sebastian Moffett, Ben Deighton, Leigh Thomas, Claire Davenport and Noah Barkin, compiled by Rex Merrifield)