Greece receives EU part of bailout loan 1 day ahead of debt maturing

Greece receives EU part of bailout loan

ATHENS, Greece — Greece received euro14.5 billion in bailout loans from 10 other European Union countries Tuesday, just in time to meet a crucial debt refinancing deadline that threatened the country with default.

The loans from other countries that use the EU’s joint currency, the euro, are part of a euro110 billion ($136 billion) joint EU and International Monetary Fund rescue package to prevent Greece from defaulting on its debt and dealing the euro a severe blow.

Greece desperately needed the money by Wednesday, when it faced repaying a debt of around euro9 billion in bonds that it could not finance otherwise. It already received the first euro5.5 billion from the IMF last week.

“These disbursements cover the immediate and short-term financing needs,” the finance ministry said in an announcement.

Germany is the largest single contributor to the first eurozone installment of the loan, with euro4.4 billion from the government-backed KfW Development Bank. It is followed by France with euro3.3 billion and Italy with euro2.9 billion. The other countries contributing are Spain, the Netherlands, Austria, Portugal, Luxembourg, Cyprus and Malta, the ministry said.

Finance Minister George Papaconstantinou, in Brussels for a finance ministers’ meeting, said the other five eurozone countries not contributing in the first installment were doing so for “technical reasons” and had not asked Greece to take any additional measures in order to provide loans.

“The countries that are not participating have expressed their intention to participate in the future, and those that have not, have not done so mainly due to technical reasons,” Papaconstantinou said at a news conference, adding that some countries were in a pre-election period or had not yet completed parliamentary procedures to release the loans.

“But it is clear that there is no issue of further conditions,” he said.

The next installment of loans will come “some time in the autumn,” Papaconstantinou added.

To secure the loans, Prime Minister George Papandreou’s center-left government passed painful austerity measures, cutting salaries and pensions, raising consumer taxes and pledging to crack down on rampant tax evasion.

The reforms have led to a backlash by labor unions, who have staged a series of strikes in recent months. Three people died during a general strike on May 5, when they became trapped in a bank torched by protesters after a demonstration in Athens turned violent. Another general strike set for Thursday is to shut down all public services and disrupt public transport.

Schools will shut down, state hospitals will function on emergency staff, while all ferries will remain tied up at port. Journalists will also walk off the job, pulling news broadcasts off the air. But air traffic controllers are not expected to join the strike, leaving the country’s airports open.

Two major demonstrations are planned in Athens against the austerity measures.

In an embarrassment for the government, the country’s deputy tourism minister resigned late Monday after tax officials said her husband, a popular singer and former film star, owes millions of euros in unpaid taxes.

Angela Gerekou, a 51-year-old former actress who once posed topless for a Greek men’s magazine, stepped down hours after the scandal broke in a daily newspaper.

Her departure comes at the start of the vacation season, with hoteliers worried by recent mass cancellations of bookings after demonstrations in Athens against the austerity measures turned violent. No replacement has been announced.

Gerekou resigned “for reasons of sensitivity and sensibility, so that there cannot be the slightest pretext to hurt the government,” the government said in a statement, adding that she claimed she had no involvement in the tax affairs of her husband, Tolis Voskopoulos.

The finance ministry confirmed Voskopoulos faces criminal prosecution for euro5.5 million ($6.8 million) in unpaid taxes and fines. It said the cases have not yet come to court, but Voskopoulos’ real estate assets have been frozen.

Voskopoulos, 70, is one of the best-known representatives of Greece’s older generation of popular singers and nightclub stars.

Greek authorities recently published the names of alleged high-profile tax cheats, mostly doctors accused of not issuing receipts, and are seeking to catch tax evaders by using satellite photos to spot undeclared swimming pools — an indicator of taxable wealth.

The government has also pledged to make collection of the estimated billions in unpaid taxes a priority.

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Associated Press writer Nicholas Paphitis in Athens contributed.