EUROPEAN UNION

Eurogroup: Athens, it's now or never

The eurozone finance ministers have approved the 86-billion-euro bailout for Greece. Germany's Schäuble has called on Athens to "take advantage of the situation," Bernd Riegert reports from Brussels.

Seven national parliaments still have to give the green light before Greece can get its much needed money, and this includes the German Bundestag, either on Tuesday or Wednesday. Finland's parliament has already said yes. If everything goes according to plan, a first loan of 26 billion euros can be paid out to Greece.

"This seems like a lot," said Eurogroup chairman Jeroen Dijsselbloem. "But 10 billion will go towards making the banking system solvent, and the other 16 billion is for outstanding transactions." These include debt repayments to the International Monetary Fund and the European Central Bank, as well as unpaid bills within the country.

The Tsipras government owes several billion euros to the private sector in Greece, bills that will now be paid with European money. "This will hopefully promote growth in Greece," said EU commissioner Valdis Dombrovskis. In October, he added, the EU and its partners would check to see if Greece has made the promised reforms. Only then would the second round of payments be made.

'Excellent cooperation'

Wolfgang Schäuble was apparently satisfied with the clarifications he received from his Greek counterpart, Euclid Tsakalotos. He had asked Tsakalotos how the Greek government was planning to implement the reforms that had been pledged in the 29 page document. Next week, Tsipras has said he will stage a no-confidence vote, followed by fresh elections a few weeks later. It remains rather unclear whether a stable, majority government can emerge.

Greek finance minister Euclid Tsakalotos

Nevertheless, Tsakalotos was able to build trust with his European counterparts, mainly through his discrete and quiescent way. "Excellent cooperation," said Klaus Regling, head of the European Stability Mechanism, who said that Greece was "well prepared" at the negotiations, much different "than before," referring to meetings in the past with Tsakalotos' predecessor, Yanis Varoufakis.

200 percent

Greece's international partners, meanwhile, are still deciding whether to take part in this bailout. In October, the International Monetary Fund will say whether it's on board. IMF head Christine Lagarde was present at these past negotiations, but only via telephone.

She didn't make any statements this time around as to how her organization views the situation, but she reiterated demands that "significant steps" be taken by European institutions to reduce Greek debt, which is set to eclipse the level of 200 percent of GDP this year.

According to the IMF, Greece cannot exist for much longer with this level of debt, and this is something that the European Central Bank and the European Commission has agreed with. However, consensus has yet to be reached as to how to solve the problem. The Europeans continue to reject any consolidation. In an interview with DW, Germany's Schäuble said there was still a possibility of extending Greece's deadlines past the traditional 32-year period.

One thing's clear, though: all European finance ministers have said that the International Monetary Fund plays an indispensable role. "We need the IMF - as a kind of guard dog," said the Slovakian finance minister Peter Kazimir.

25 billion for the banks

The finance ministers were also forced to deal with the precarious question of Greek banks. Well over a quarter of the 86 billion euros on its way to Greece is reserved for the bank system, which are, well, bankrupt. A stress test is to be carried out by October.

The European Commission and the European Central bank have been given a report suggesting that the prolonged closure put intense pressure on the Greek financial system. The damning text states that Greek banks have been practically cut off from capital markets and that they are only kept alive with ECB funding.

The analysis also states that the Greek economy will continue to shrink this year, due to "political insecurity," and that any growth won't come until 2017.