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UPDATE 2-Euro zone backs 1 bln euro payout for Greece after disputed bill shelved
December 17, 2015 / 3:16 PM / 2 years ago

UPDATE 2-Euro zone backs 1 bln euro payout for Greece after disputed bill shelved

(Updates with provisional agreement to disburse)

By Paul Taylor and Renee Maltezou

BRUSSELS/ATHENS, Dec 17 (Reuters) - Euro zone deputy finance ministers provisionally approved the payout of a 1 billion euro aid tranche for Greece on Thursday, an EU official said, after Athens withdrew a disputed package of social justice measures from parliament.

"It was approved subject to Greece completing two or three technical steps such as the publication of decisions in the official journal," the official said.

"That should be done by Friday so the board of the European Stability Mechanism can make the disbursement on Friday night."

Greece's leftist government was earlier forced by international lenders to withdraw a parallel economic programme bill from parliament after they threatened to withhold the next slice of its bailout finance, EU and Greek sources said.

Prime Minister Alexis Tsipras had submitted a package of social justice measures, intended to cope with what he calls the "humanitarian crisis" in Greece, to lawmakers to assuage criticism in his Syriza party of the tough reforms they had been forced to adopt under the country's third bailout programme.

A Greek parliament source said the bill had been removed from the agenda after the lenders and conservative opposition members questioned how the measures would be funded, and it would now be discussed in committee in early January.

The bailout agreed last August stipulates that all economic legislation be submitted for prior consultation to the institutions representing euro zone and International Monetary Fund creditors.

The so-called parallel programme was put to parliament late on Monday. It extends measures to tackle the humanitarian situation by a year and takes steps to help the jobless.

Greek lawmakers approved on Tuesday a bill required by the creditors to deal with non-performing business loans, partially privatise the national electricity grid operator and reform the public sector wage grid to link pay to performance.

That cleared the way for deputy finance ministers in the Eurogroup Working Group to release the next aid tranche. However, a euro zone source said Germany and some other countries threatened to call off the meeting if Athens went ahead with the parallel programme without prior approval. (Additional reporting by Renee Maltezou in Brussels and Lefteris Papadimas in Athens; Writing by Paul Taylor; Editing by Noah Barkin/Mark Heinrich)

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