Greece has repaid a €3.4bn loan to the European Central Bank (ECB) on time, following the German parliament’s approval of a third bailout package, Sky News reports. There had been concern the €86bn (£61bn) cash injection would not be approved in time for the 20 August repayment deadline, forcing Greece to default on the debt. But German MPs voted overwhelmingly on Wednesday to back the bailout, with 454 of the 631-seat Bundestag agreeing to the measures.
The release of the money was then signed off by European fund supervisors on Wednesday evening. The package will be paid in instalments spread over the next three years.The first payment will total €26bn; €10bn of that will be used to recapitalise the Greek banking system and the remaining €16bn, paid in parts, will largely go towards repaying debts. Some €13bn of this first instalment has now been transferred to Greece, allowing Prime Minister Alexis Tsipras to meet the ECB deadline.
The repayment to the bank, originally totalling €3.2bn but rising to €3.4bn once interest had been taken into account, would not have been affordable for the country without the help of the bailout. Accepting the conditions of the rescue package was a major policy reversal for Tsipras, who had risen to power on the back of promises to do away with austerity for Greeks. When the Greek Parliament voted to approve the bailout many of his own Syriza party voted against him, meaning he had to rely heavily on the opposition to get the bill passed.
He is now expected to announce action regarding the future of his government. A vote of confidence in the Greek Parliament or early elections are both being touted as possibilities. The bailout package is the third Greece has received from Europe in just over five years.