Push to get EFSF up and running
Athens and Brussels are in a race against time to activate the new support mechanism for Greece in September so that its first tranche is disbursed then, instead of the sixth one, amounting to 8 billion euros, from the existing mechanism.
Finance Minister Evangelos Venizelos said on Tuesday that decisions taken at the July 21 European Union summit on the new role of the European Financial Stability Facility (EFSF) must be applied rapidly and in full.
The EFSF is a ?critical factor in the participation of both the public and private sectors? in the Greek aid package in terms of the guarantees it provides, Venizelos stated.
He was speaking after a teleconference call with European Commissioner Olli Rehn and Eurogroup chairman Jean-Claude Juncker, the head of the EFSF, Klaus Regling, and Charles Dallara, the managing director of the Institute of International Finance.
The call reviewed progress on private sector involvement (PSI) in the Greek aid package. No decisions were reached yesterday, although it was confirmed that there is a significant participation in the PSI but that this is far from being considered sufficient yet. It was reported that, out of a target of 135 million euros, some 70 billion euros of bond swaps have been secured to date, not including the participation of social security funds.
Sources suggest that the swap of existing bonds for new ones will cover a longer period than that previous agreed to, as the rollover will not just cover bonds up to 2020, but also up to 2024.
Athens is pressing for the decisions of the July 21 summit to be ratified as soon as possible, with Venizelos stating that this is ?of particular significance,? although there are certain countries, such as the Netherlands, that are not expected to pass the relevant legislation before October. Finland has also warned it may not ratify the decisions at all.
