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The Eurogroup has approved the transfer of funds to Greece worth a total of €26 billion, but it will be coming along in small bits, mainly because of the political situation in the country. Some of these tranches however are linked to the implementation of new measures. The Eurozone has made it perfectly clear that the first progress test on the new programme will have to be completed by early November, or by 15 November at the latest.

Athens asked that these 26 billion be transferred by 19 August. The aim is to have €3 billion instantly available to cover the arrears of the public sector to suppliers. But at this stage, it will receive 13 billion, out of which almost 12.5 billion will go overseas for debt repayment, and a mere 500 million - to service the outstanding debt inside Greece. Another 10 billion will be on their way straight after that, for the recapitalization of banks.

Greece will receive the remaining €3 billion in the fall – in one or more tranches, provided the key policies laid down in the memorandum are implemented.

Out of the €13 billion to be remitted by August 19, 12.5 billion will be allocated as follows:

-       repayment of €3.2 billion to the IMF on 20 August

-       repayment of roughly €500 million as interest on arrears

-       €1.7 billion as the September instalments to the IMF

-       €7.16 billion for the repayment of the July bridging loan. This loan must be repaid by 17 October, but Greece might choose to do it immediately after it has received the tranche.

Regarding the 10 billion for banks, this is a kind of down payment until the recapitalization of the Greek banking system is complete. Eurogroup has also decided that the second bank recapitalization and restructuring tranche could reach €15 billion and be transferred after the first review before 15 November. The bank stress tests will have to be completed up until then. It is worth pointing out that the funds for bank recapitalization will be remitted through the European Stability Mechanism.

The government's original plan stipulated that the sum of €26 billion be transferred at once now, while the European Stability Mechanism was meaning to eke out the amount by the end of the year.

How the ministry of finance has "read" the Agreement

Once the agreement was ready, the ministry of finance stated the following:

The Eurogroup meeting confirmed the 12 July agreement and the finance ministers are prepared to take action, such as the extension of the payments timeframe in order to ensure the sustainability of Greek debt. This gives a chance to the IMF to take part in the programme, something Eurogroup considers essential. These actions will depend on the implementation of the programme, which will be established by the first assessment (in October 2015).

Ministry of finance sources believe that the lower primary budget surpluses, which were agreed in Athens, remain in force: -0.25% for 2015, + 0.5% for 2016, + 1.75% for 2017 and +3.5% for 2018.

The Eurogroup has decided that the programme will be worth a total of €86 billion. This amount includes up to 25 billion for the banks.

The first instalment of €16 billion will be remitted in two tranches:

-       10 billion for bank recapitalization will be remitted at once;

-       16 billion will be split in two: 13 billion by 20 August, the remaining 3 billion will be transferred by one or more instalments in the autumn, provided that the requisite measures are implemented.

The second instalment for the banks will be up to €15 billion, according to needs after the stress tests. It will be transmitted after the first inspection and the completion of stress tests, but prior to 15 November.

Eurogroup has ruled out the bail-in for depositors, regardless of deposit amounts. But the participation of bond holders in the recapitalization is not excluded. The final decision will be taken after the completion of stress tests in October.

Eurogroup has concurred with the creation of a new independent privatization fund. Valuation of assets will be done in such a way as to ensure that it reflects their actual value. The law must be passed by the end of October 2015 to enable the fund to start working by the end of 2015. This is a sovereign wealth fund, with a mode of operation that puts it wide apart of the existing Privatization Agency. It will cover state-owned properties and shares of Greek banks after their recapitalization. The fund will be looking to accrue €50 billion, of which 25 billion will go to bank recapitalization. The remaining 25 billion will be allocated as follows: 12.5 billion for debt repayment and 12.5 billion for economic development. The revenue of the former Privatization Agency went exclusively for debt repayment.

The Eurogroup statement mentions the primary measures included in the agreement, which was voted by parliament on Friday morning. They include combating tax evasion, pension system reform, boosting investment, modernization of the public sector, labour market reforms, commodity market reforms, bad loan management, etc.