March 16, 2012 in Nation/World

IMF OKs $37 billion in loans to help Greece

Associated Press
 
Associated Press photo

Shipyard workers chant slogans outside the Greek Ministry of Finance during a protest for unpaid wages in Athens Thursday.
(Full-size photo)

ATHENS, Greece – The International Monetary Fund on Thursday approved $37 billion in funding for crisis-hit Greece over the next four years, while Standard and Poor’s warned that the country’s new bonds remained vulnerable to default despite this month’s massive debt writedown.

The IMF’s executive board granted the immediate release of $2.15 billion of these funds as part of the country’s second bailout, a statement said.

Greece will receive a total $225 billion in rescue loans from its eurozone partners and the IMF to keep it afloat until 2016, as dizzily high borrowing rates have blocked its ability to raise money on the international bond markets.

IMF Managing Director Christine Lagarde warned that risks to Greece’s austerity and reform program still “remain exceptionally high, and there is no room for slippages.”

She said new pain lies ahead for Greeks, despite the tough measures implemented over the past two years.

“Full and timely implementation of the planned adjustment – alongside broad-based public support and support from Greece’s European partners – will be critical to success,” she said in a statement.

The new bailout cash was approved after Greece secured a massive debt-reduction deal with banks and other private bond holders, swapping old government bonds for new ones that have better repayment terms.

The ratings agency Standard and Poor’s assigned a CCC score – or still vulnerable to default – and said Greece’s sovereign rating would remain in selective default until the exchange was completed next month.

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