Credit line route backed

Eurogroup agrees to study pre­cau­tion­ary support to help Greece into next phase

Kathimerini English - - Front Page -

The head of the Eurogroup, Jeroen Di­js­sel­bloem, said yes­ter­day that eu­ro­zone fi­nance min­is­ters are be­hind the idea of pro­vid­ing Greece with the fi­nan­cial support that would al­low it to exit its bailout at the end of the year with­out re­quir­ing fur­ther fund­ing from the In­ter­na­tional Mon­e­tary Fund.

“There is strong support for a pre­cau­tion­ary credit line in the form of an ex­ist­ing Euro­pean Sta­bil­ity Mech­a­nism tool called the ECCL – En­hanced Con­di­tions Credit Line – and that is the path we will now fur­ther pur­sue and work on the con­di­tions that will go with that,” Di­js­sel­bloem told a news con­fer­ence.

“There is also a broad un­der­stand­ing the IMF needs to con­tinue be­ing in­volved and a fur­ther dis­cus­sion will have to take place on the ex­act form of this in­volve­ment,” the Eurogroup chief said after the min­is­ters met in Brussels.

Ac­cord­ing to Reuters, three op­tions to help Greece exit its bailout at the end of the year were dis­cussed by eu­ro­zone fi­nance min­is­ters. They all cen­ter around the use of some 11.5 bil­lion euros in bank re­cap­i­tal­iza­tion funds re­main­ing with the Hel­lenic Fi­nan­cial Sta­bil­ity Fa­cil­ity (HFSF).

In the first op­tion, the re­cap­i­tal­iza­tion money would be re­turned and Greece would in­stead ap­ply for an ECCL from the ESM.

This would mean sign­ing a new mem­o­ran­dum of un­der­stand­ing, which the gov- ern­ment wants to avoid at all costs.

Un­der the sec­ond sce­nario, the bank re­cap­i­tal­iza­tion money could be used for Greek debt ser­vic­ing and turned into a fi­nan­cial buf­fer.

The third op­tion is to ex­tend the cur­rent bailout by six to 15 months. That would give Greece more time to meet the cri­te­ria for the re­lease of the last, 1.8-bil­lion-euro, tranche of the ex­ist­ing pro­gram, which will be lost un­less it is dis­bursed be­fore the end of the year.

Eu­ro­zone fi­nance min­is­ters would then agree that the 11.5 bil­lion euros could be put to a dif­fer­ent use after it is re­turned to Greece’s lenders at the end of the year un­der a oneyear ex­ten­sion of the bailout.

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