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EU executives to recommend use of EFSM for Greek bridge financing: officials
July 14, 2015 / 1:14 PM / 2 years ago

EU executives to recommend use of EFSM for Greek bridge financing: officials

BRUSSELS (Reuters) - The European Commission will recommend providing Greece with bridge financing over the next month through the European Financial Stability Mechanism (EFSM), in defiance of strong British and Czech objections, EU officials said on Tuesday.

Greece needs to borrow 7 billion euros ($7.7 billion) in July and another 5 billion in August to pay its obligations to the European Central Bank and the International Monetary Fund.

Athens is supposed to get financing through a new 86 billion euro bailout, but it will take at least four weeks before a deal on that is agreed. Meanwhile it needs to pay back loans to the ECB and IMF next Monday.

EU finance experts have been considering more than a dozen ways to provide such temporary financing but the option that the Commission will recommend is the use of the EFSM -- a fund of 13.2 billion euros, backed by the EU budget.

Britain and the Czech Republic have both strongly objected to the use of the EFSM to finance Greece, even temporarily, but the decision to use the money is taken by a qualified majority of EU countries, which means 15 countries representing 65 percent of the EU population would have to support it.

Britain and the Czech Republic can therefore be outvoted, despite their objections, even though in the case of Britain this could have a negative impact on Britain’s public opinion on the EU ahead of a referendum on EU membership by 2017.

Reporting By Jan Strupczewski; editing by Philip Blenkinsop

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