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Greece pays back 2 bn euro of loan to EU

BRUSSELS, Feb 20 (KUNA) -- The European Stability Mechanism (ESM) and Eurozone's permanent bailout fund, announced Monday that it received a loan payment of two billion euro from the Greek government. ESM Managing Director Klaus Regling said in a statement "the prompt payment shows Greece is a reliable contract partner, where it is a sign that the restructuring of the Greek banking sector is progressing well and we will continue to work with Greece during the remainder of the program".
As part of the third assistance program for Greece, the ESM had disbursed 5.4 billion euro to recapitalize Greek banks in 2015, and Greece used the funds to recapitalize National Bank of Greece (NBG) and Piraeus Bank, the statement added.
Moreover, this money was taken out of the 25 billion euro available to recapitalize the Greek banks as part of the third assistance program, one condition of the approval for recapitalizing NBG was the sale of its subsidiary Finansbank, and to use the proceeds to pay part of the recapitalization.
The statement noted, once NBG had done so, the ESM was entitled to request payments of those proceeds from Greece, resulting in the early payments of part of the ESM loans.
The Luxembourg-based ESM has the mandate to preserve financial stability in the euro area by providing financial assistance to Member States with severe financing problems. It is a permanent inter-governmental institution, inaugurated on 8 October 2012, the statement concluded.
Meanwhile, Eurozone finance ministers are meeting in Brussels this evening to discuss the economic situation in Greece. (end) nk.mys