ESM chief says Greek aid loan needs may be smaller than previously expected

European Stability Mechanism (ESM) logo Wall Street Journal via

Reuters – The head of the euro zone’s European Stability Mechanism (ESM) bailout fund has told a German newspaper that Greece was making good progress with its reform drive and it may not need as much credit as previously planned.

Greece has received three international bailouts since 2010, with the third due to end in August 2018. By then, Greece is expected to be able to finance itself from markets.

“We are pleased that the amount of the loan for Greece may remain significantly below the ESM programme’s limit of 86 billion euros,” ESM chief Klaus Regling told Handelsblatt in a preview of a story due to appear in the business newspaper’s edition on Monday.

Un-used funds could be used to repay loans to other creditors, he said.

The issue of debt relief is expected to be part of negotiations over Greece’s bailout exit in the coming months but Regling said any debt relief was conditional on Greece fully implementing its reforms and on all euro zone states agreeing.

“If the government in Athens continues to work as well, the review of this third programme can be concluded quickly,” he said.

Greece is gradually returning to growth after a deep recession and has exceeded targets of returning to a small primary budget surplus from 2016 onwards.

Greek Prime Minister Alexis Tsipras told Die Welt and other European newspapers at the weekend that he expected the bailout to end on time, “that this adventure has an end in August 2018″