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Greece gets first installment of loans from European Union

BRUSSELS - Bloomberg | 5/18/2010 12:00:00 AM |

The European Union said it transferred the first installment of emergency loans to Greece, allowing the country to repay 8.5 billion euros ($10.6 billion) of bonds.

The European Union said it transferred the first installment of emergency loans to Greece, allowing the country to repay 8.5 billion euros ($10.6 billion) of bonds due Wednesday and avoid default.

The EU’s first payment of 14.5 billion euros was sent on Tuesday, EU spokesman Amadeu Altafaj said.

The International Monetary Fund, which is participating in the bailout, made its initial contribution of 5.5 billion euros last week. The loans will cover Greece’s financing needs for May and June, a Greek Finance Ministry official said on Monday. Wednesday’s bond maturity is the last Greece faces until 8.6 billion euros of three-year debt matures in March 2011.

Greek Prime Minister George Papandreou has raised taxes, cut wages and reduced government spending in a bid to tame a deficit that reached 13.6 percent of GDP last year, more than four times the EU limit.

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