Greece will receive €49.1 billion from the eurozone's temporary rescue fund by March following approval by eurozone finance ministers on 13 December.
The European Financial Stability Facility (EFSF) disbursed €34.3bn this week, with a further €14.8bn coming between January and March. The International Monetary Fund is expected to loan an additional €3.3bn, bringing the total to €52.4bn, but this is dependent on approval by the IMF's board.
About €16bn will be used to recapitalise Greece's struggling banking sector, €7bn will be used to make up for budget shortfalls, and about €11bn will fund Greece's debt buy-back scheme.
The decision by finance ministers brought to an end weeks of wrangling over whether, how and when to disburse Greece's cash. The deal was provisionally agreed by finance ministers on 26 November but was conditional on the debt buy-back operation being successfully concluded.
“We are convinced that the programme [to reform Greece's economy] is back on a sound track,” Jean-Claude Juncker, the president of the Eurogroup of eurozone finance ministers, said after the meeting.
Nevertheless, on Monday (17 December), the latest report from the ‘troika' of Greece's international lenders – the European Commission, European Central Bank and IMF – warned that “very large” risks to the country's reform programme remained.
“The key risks concern the overall policy implementation, given that the coalition supporting the government appears fragile and some components of the programme face political resistance, despite the determination of the government,” the report said. “Important budgetary measures are likely to be challenged in courts, which could lead to the need to fill a fiscal gap emerging as a consequence.”
Separately, the Commission published the latest assessment of its taskforce for Greece, the group providing technical assistance to the stricken country. The report said that good progress had been made in preparing reforms to curb corruption and money-laundering and to improve the business climate.
A privatisation programme has not gone so well, the report said, but many large assets would be sold off early next year. There will be further liberalisation in sectors such as transport, retail, electricity and fuel distribution in 2013.
Commission analysts said that recession in Greece had been “much deeper than expected” since efforts to reform Greece's economy started, but growth is expected to return in the last three months of 2013.