By Magda Panoutsopoulou

ATHENS

The European Stability Mechanism (ESM) on Friday approved the release of a much-needed third tranche of bailout money for Greece worth €8.5 billion ($9.7 billion).

In a press release on its website, the Luxembourg-based eurozone bailout fund announced: “The first disbursement under this tranche will amount to €7.7 billion [$8.8 billion], and is expected to be made by the ESM on Monday. Out of this amount, €6.9 billion [$7.86 billion] will be used for debt servicing needs and €0.8 billion [$.91 billion] for arrears clearance."

“Today’s decision by the ESM Board of Directors shows that Greece has completed the reforms required at this stage,” said ESM Managing Director Klaus Regling.

“The government and people of Greece deserve recognition for having come a long way in returning to fiscal sustainability and economic growth. The government should continue on this path to rebuild a competitive economy and regain investors’ trust.”

The country will receive another disbursement of €800 million ($911 million) by this September so long as Greece makes significant progress on arrears clearance, using its own resources for this effort as well as funding from the disbursement approved today, the statement said.

ESM financial assistance for Greece will reach €39.4 billion ($44.9 billion), out of a total program of up to €86 billion ($98 billion) of loan money needed for the country to make its debt payments.