Friday April 18, 2014 Search
Weather | Athens
17o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
EU approves 35.5 billion for Greece

Euro-area finance ministers freed 35.5 billion euros of aid for Greece and backed the country’s debt swap with private creditors, including the use of collective action clauses.

The decision, made by ministers on a conference call on Friday, allows the bond swap to close this month as planned with as much as 30 billion euros in public sweeteners, Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro-region finance chiefs, said in an e-mailed statement. They also released 5.5 billion euros for Greek interest payments and said Greece was on track to win the rest of its bailout funds.

“The necessary conditions are in place to launch the relevant national procedures required for the final approval of the euro area’s contribution to the financing of a second Greek rescue package,” Juncker said. He welcomed a report from European and International Monetary Fund officials on Greece’s efforts and said the ministers expect a “significant contribution” from the IMF in the new package.

Euro leaders have hailed the debt exchange as a central element in their efforts to contain the sovereign debt crisis and get Greece’s economy back on track. IMF Managing Director Christine Lagarde said Thursday that the crisis, had it remained unchecked, could have done more damage to the global economy than the financial market collapse of 2008.

Harder default’

The debt swap and second rescue package may not cure Greece’s long-term debt woes, said Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies. The debt swap aims to reduce Greece’s debt burden by more than 100 billion euros and lower debt to 120.5 percent of gross domestic product by 2020.

“We still don’t have a solution for Greece, so there will be a harder default to come,” Wyplosz said. “Greece can’t grow with this kind of debt so something more has to give.”

The euro-area ministers are scheduled to meet in Brussels on March 12 to discuss further elements of Europe’s crisis- fighting efforts, including whether and how to increase the firewall provided by the euro area’s rescue funds. German Finance Minister Wolfgang Schaeuble said that ministers will decide on the main Greek aid package at that meeting.

‘Only a foundation’

While the participation rate in the swap was “very heartening,” it remains decisive that Greece now carries out the necessary economic reforms, he said. “Naturally, this is only a foundation that’s been laid,” he told reporters in Berlin.
The International Swaps and Derivatives Association’s determinations committee meets in London on Friday to weigh whether the use of the collective action clauses is a credit event that will trigger the swaps. Schaeuble said that decision won’t affect Greece’s aid.

Juncker said on Friday that ministers had been told Greece would use collective action clauses on bonds governed by Greek law and that finance ministers were encouraged by “high private-sector participation” in the swap. The ministers said participation could rise further during a sign-up extension for bonds governed by foreign law.

The debt swap operation has been a “resounding success,” said Amadeu Altafaj, a spokesman for economic and monetary affairs commissioner Olli Rehn, to reporters in Brussels on Friday.

New bonds

The Greek government said Friday it will reach its target for the debt restructuring, with investors holding 95.7 percent of eligible bonds taking part. The government’s figure includes using the clauses to enforce participation, a move that may trigger insurance payouts under rules governing credit-default swap contracts.

In the exchange, investors will receive new bonds with a face value of 31.5 percent of the old ones together with notes from the European Financial Stability Facility. The new debt is governed by English law and comes with warrants that will provide extra income in years when Greek economic growth exceeds thresholds. The net present value loss for investors is more than 70 percent.

If the swaps do get triggered, it probably won’t roil financial markets, Italy’s deputy finance minister, Vittorio Grilli, told Bloomberg News on Friday.

“I think it’s in the market already,” Grilli said. “It is not that it will be taking anyone by surprise. So I think a lot of these events are already priced in.”

[Bloomberg]

ekathimerini.com , Friday March 9, 2012 (16:28)  
PPC to issue corporate bond of 500 mln
Primary surplus continued by end-March
Eurobank eyes top Core Tier 1 level in Greece
Tourist spending up 17.3 pct
Greece offers to help find Turkish F-16 lost in 1996
Greece officially offered on Thursday to assist Turkey in its efforts to locate and salvage a Turkish Air Force fighter jet which crashed in the Aegean almost 20 years ago. Greek Defense Min...
Talks lined up in wake of ‘shameful’ soccer scenes
The government has pledged to meet with soccer officials after Easter to tackle unruliness in the game following wild scenes at the Greek Cup semifinal between PAOK and Olympiakos in Thessal...
Inside News
BASKETBALL
Former Red Bourousis wrecks Olympiakos´s hopes for a break
Olympiakos tried harder in Game 2 of the Euroleague play-offs in Spain, and Real Madrid was not as good on Thursday as in Game 1, but the Spaniards still emerged victorious on the night with...
SOCCER
Greek soccer turns fishier than ever
Soccer in Greece reached new lows in scenes unseen since the national team’s triumph in Euro 2004, as PAOK and Olympiakos served up a cup semifinal with PAOK emerging as the winner and the s...
Inside Sports
COMMENTARY
The placebo effect and the economy
Among the greatest mistakes made in the years of Greece’s hard landing is that citizens did not get the chance to sense that aside from austerity and pain the economic adjustment program als...
COMMENTARY
Ukraine is a crisis—but not a Cold War
Given Russia’s annexation of Crimea, the imposition of US and European sanctions, and the potential for more escalation in Ukraine, we are witnessing the most important geopolitical events s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Former Red Bourousis wrecks Olympiakos´s hopes for a break
2. PPC to issue corporate bond of 500 mln
3. Greece offers to help find Turkish F-16 lost in 1996
4. Primary surplus continued by end-March
5. Eurobank eyes top Core Tier 1 level in Greece
6. Tourist spending up 17.3 pct
more news
Today
This Week
1. Greece startup leaders say they can’t break jobless cycle alone
2. Ground-breaking Good Friday mass signals thaw in Cyprus
3. Mayoral candidates clash over Athens mosque plans
4. Seven arrested over Toumba violence
5. National Bank of Greece plans senior unsecured bond sale
6. Greek current account deficit widens in February
Today
This Week
1. Bomb explodes outside Bank of Greece
2. Samaras sees no need for third bailout
3. Greece's market return mirrors return of tourists
4. CCTV footage from Nigrita Prison shows signs of inmate torture [Video]
5. Car bomb explodes outside Greek Central Bank building, no one hurt [Update]
6. Parties start announcing candidates for European Parliament elections
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.