Updated 10:56 AM EDT, Thu, Mar 28, 2024

Greece Crisis: 2 Billion Euro Bailout Money Witheld by Creditors

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In business, you don't put your money in bad investments.

It seems that Euro Zone thinks of Greece as one of those bad investments, as reports from Reuters say that they are withholding the 2 billion Euro bailout for the country until reforms are done.

A European Central Bank Stress Test has revealed at the end of last month that the banks needed a whopping 14.4 billion euros in additional capital to survive their adverse economic conditions.

With this number, some of Greece's need may come from private investors, but the Euro Zone is expected to provide the rest, using money that is already earmarked for such purpose. However, the 10 billion Euros for the zone's bailout fund is not to be given to any country lightly.

The recapitalization money, which can be transferred to the Hellenic Financial Stability Fund, is still on hold. The ministers said in a document, "We stand ready to support the disbursement of the 2 billion euros sub-tranche linked to the first set of milestones and the transfer to the HFSF of the funds needed for the recapitalization of the Greek banking sector out of the 10 billion euros earmarked for this purpose, provided that the agreed conditionality is met."

The head of the Euro Zone finance ministers, Jeroen Dijsselbloem said via Twitter that Athens have to meet its targets, insisting that there has to be "commitment of the Greek authorities to fulfill the required measures in the course of the week."

The New York Times noted that Greece is not as desperate for help today compared to last summer, but it is still eager to secure the new tranche so as to begin addressing domestic problems such as house foreclosures.

Greece, on its part, said on Monday that it will need a political decision to "overcome a dispute", with Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker discussing bad loans. Greek officials are said to have refused details concerning the deadlock, but it has been noted that they have been stressing the fact that Athens wants to fulfill all the points of the bailout agreement without making life more difficult for poorer citizens.

Still, the Euro Zone refuses to budge. "The Eurogroup will press Greece to find sufficient solutions till Wednesday. There is always room for compromise. but I don't think the ministers would accept rules that are much more favorable for people not paying their mortgages than in any other country," an official said.

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