Now the inevitable has been delayed again as a loan was taken out to repay another loan. Essentially, the can got kicked down the proverbial road yet again, just in another direction.
Greece has narrowly escaped defaulting to the European Central Bank after it received an emergency bridge loan of €7.16 billion from the European Union.
The funding came from the European Financial Stability Mechanism, a fund that non-eurozone European countries contribute to. UK Chancellor George Osborne had spoken out against use of the EFSM, but backed down on the assurance that the money would be guaranteed. Part of the money from the loan will be kept aside in an escrow fund as a guarantee.
The bridge loan will also be used to pay €2 billion to the International Monetary Fund. Greece defaulted on an IMF payment of €1.55 billion on June 29, the same day that it called a referendum asking the Greek people if they wanted to accept the austerity demands of its creditors.
Full article: Greece escapes default to the ECB after emergency cash from the UK-funded EFSM (The Independent)