Eurogroup ministers back Greece, Cyprus loans

Euro-area finance ministers approved on Monday the release of fresh rescue loans to Greece, while Cyprus received its first emergency loan from the European Stability Mechanism (ESM).

Greece won its two next bailout installments, totaling 7.5 billion euros. It will receive a tranche of 4.2 billion euros later this week after the European Financial Stability Facility (EFSF) officials  meet in the next few days.

The second sub-tranche of 3.3 billion euros will be disbursed in June once Greece has met key measures agreed with international creditors, aka Troika. Inspectors are expected to pay Greece a visit in the next few weeks.

Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup, said that in Greece would have to reform tax collection, liberalize professions and overhaul its public administration in order to receive the second sub-tranche.

The ESM, bloc’s permanent rescue fund, also said on Monday that it delivered 2 billion euros from an activated 10 billion euros in aid package for Cyprus, as the Mediterranean island will scoop as much as 1 billion euros in June.

The green light was given, as expected, to Greece and Cyprus loans. However, finance ministers from the 17-nation bloc were at odds over next step to a full banking union, the bloc’s key plan to counter the debt crisis.

Finance ministers of France, Spain and Portugal called for a quick progress in setting up the banking union, but their German colleague Wolfgang Schaeuble said a rush in the banking policy warrants changing EU treaties.

Dijsselbloem signaled yesterday that the euro area should go forward with its plan to bring its banking under common supervision and regulations, where he said concerns about a revision to the plan were “understandable."

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