* Greece receives 14.5 billion euros in EU aid
* Will repay maturing 8.5 billion euro bond on May 19
* Development steadies global market jitters
* EU cracks down on hedge funds
(Recasts with Greek developments, previous Mannheim)
By Lefteris Papadimas
ATHENS, May 18 (Reuters) - Greece received a 14.5 billion euro ($18 billion) loan from the European Union on Tuesday and can now repay its immediate debt, a development that helped to steady global investor's jitters.
The euro edged up from Monday's four-year low against the dollar after officials said Greece had received the 14.5 billion euro tranche of its EU emergency loan, some of which would be used to repay in full an 8.5 billion euro bond maturing on Wednesday.
The EU and IMF agreed at the beginning of the month to lend Greece 110 billion euros ($137 billion) over three years to help it pay billions in expiring debt after being shut out of financial markets by the high cost of borrowing.
With 5.5 billion euros already delivered by the IMF, Greece has now received the first 20-billion euro tranche of the loans, the Greek Finance Ministry said in a statement.
"Greece no longer has the liquidity anxiety, it will not need to go to markets to borrow to pay salaries and pensions," EFG Eurobank economist Gikas Hardouvelis told Reuters.
But it still faces a mammoth task to claw its way out of recession and though it has gained a breathing space, Greece must now convince markets it can rein in its deficits so that it can eventually start borrowing again.
There are also concerns other EU countries such as Portugal and Spain could follow Greece and need aid from the bloc.
Greece will be paying interest of around 5 percent, well below current market yields of well over 7 percent for Greece's 3-year bonds.
"The programme has been designed so that Greece is able to stay away from the financial markets through the end of 2011 and the first quarter of 2012. We don't expect that to be the case, we want to come back to markets much sooner," Finance Minister George Papaconstantinou said in Brussels.
Socialist Prime Minister George Papandreou's government has already implemented sizeable public sector wage cuts and raised taxes in return for the EU/IMF bailout.
In response, sometimes violent protests have swept Athens and a general strike and demonstration have been called for Thursday. But the government still has more painful measures in the pipeline such as pension reform and cuts in spending.
Greece's main labour unions, representing some 2.5 million workers, or half the Greek workforce, said on Tuesday they will carry out more strikes in June if the government's pension bill raising retirement age is not changed.
"The government hasn't realised yet the size of the explosion," said Ilias Iliopoulos, general-secretary of public sector union ADEDY.
Greece aims to cut its deficit from nearly 14 percent of GDP to 3 percent by 2014, a task the like of which almost no government has achieved before. An economy deep in recession, with GDP projected to contract by 4 percent this year, makes the job even harder.
But U.S. stocks opened higher on Tuesday as investors became more optimistic on the progress that euro-zone finance ministers were making on Greece's rescue package.
Global markets steadied as investors were encouraged by comments from European ministers that they will clarify this week some technical and legal details of the 750 billion euro ($925 billion) rescue plan [ID:nLDE64G290].
The 10-year Greek/German government bond yield spread tightened and the cost of insuring against a Greek default fell, helping to support the euro.
"The euro has been oversold so there is at least a bounce in the short term," said Carol Hurley, senior market strategist at Lind-Waldock in Chicago. "But longer term, the euro could go to parity (with the dollar), maybe even by the end of the year."
HEDGE FUNDS UNDER SCRUTINY
Earlier, Asian stocks had fallen to three-month lows as traders continued to fret about the impact that euro zone spending cuts would have on exporters in the region.
Meanwhile German investor sentiment fell sharply in May on concern growth will be stifled the Greek rescue package.
The closely watched ZEW analyst and investor survey saw medium-term growth down in Europe's biggest economy.
"The EU rescue package will in the mid-term reduce budget deficits, but it will also dampen demand and mid-term growth will be dampened as well," ZEW economist Michael Schroeder told reporters.
EU finance ministers meeting in Brussels meanwhile overrode British objections and backed stricter rules on hedge funds as part of efforts to learn the lessons of the global financial crisis and create a more stable financial system.
Greece blames hedge funds for exacerbating its borrowing problems by betting against its debt and wants them banned. Italy's Economy Minister Giulio Tremonti for his part called for curbs on credit default swaps.
Eighty percent of the bloc's hedge funds are located in Britain. Any changes are likely to take effect around 2012.
U.S. President Barack Obama has discussed the debt crisis with European leaders and some U.S. analysts warn the U.S. economy, where GDP growth is forecast at 2.8 percent this year, could stall again if Europe's crisis fails to stabilise.
IMF First Deputy Managing Director John Lipsky said the global economy "remains sluggish, uneven and still in need of policy support".
"As recent events in Greece have shown, risks remain considerable," he told a symposium in Tokyo.
(Additional reporting by John O'Donnell, Gavin Jones, Sumeet Desai, Brian Rohan, and Renee Maltezou; Editing by Angus MacSwan) ($1=.8054 Euro)