ECONOMY

Credit line conditions laid out

A document submitted to the German parliament on Wednesday in the context of the chamber’s vote on Thursday on the two-month extension Athens has asked for describes the plan for Greece after the end of the bailout program. The document says that once the current monitoring process is successfully completed, a precautionary credit line amounting up to 10.9 billion euros could be extended to Greece.

The document adds that the European Commission believes Greece’s funding needs for 2015 will range between 6 and 12 billion euros, so the amount of 10.9 billion could cover up to 90 percent of next year’s requirements.

In order for Greece to have access to the credit line, it would also need to have access to the money markets, thus ensuring the coverage of the country’s obligations.

The German government supports the demand for the Greek program’s extension by two months, up to February 28, as well as the adoption of the credit line with an estimated duration of 12 months. However the document notes that for the credit line to apply, Greece and its creditors will need to have reached an agreement after the ongoing inspection.

For now the Bundestag in Berlin only has the preliminary report of the creditors’ representatives in Greece regarding the course of the Greek program at its disposal, and according to what the document submitted to the German parliament said, the conditions for the supply of a precautionary credit line at this stage have been fulfilled.

The authors of the document added that the existing weaknesses of the Greek economy should be handled as part of the conditions under which the credit line will be offered. The conditions for the credit line include that there will be no threat to the credit stability of the eurozone, that there is a sustainability analysis of the Greek debt, that Greece meets its fiscal targets and improves its current account balance, that Athens has access to the money markets, that it improves its external position – referring to the country’s exports – and that the systemic banks remain solvent.