BRUSSELS (MNI) – Following is the full text of a statement made by
the finance ministers of the 16 Eurozone countries (the Eurogroup) on
the details of support to Greece agreed Sunday by EMU states:
“Following the statement by the Heads of State and Government of
the Euro area on 25 March, Euro area Members States have agreed upon the
terms of the financial support that will be given to Greece, when
needed, to safeguard financial stability in the Euro area as a whole.
“Euro area Members States are ready to provide financing via
bilateral loans centrally pooled by the European Commission as part of a
package including International Monetary Fund financing.
“The Commission, in liaison with the ECB, will start working on
Monday April 12th, with the International Monetary Fund and the Greek
authorities on a joint programme (including amounts and conditionality,
building on the recommendations adopted by the Ecofin Council in
February). In parallel, Euro area Members States will engage the
necessary steps, at national level, in order to be able to deliver a
swift assistance to Greece.
“Euro area Member States will decide the activation of the support
when needed and disbursements will be decided by participating Member
States.
“The programme will cover a three-year period. The euro area Member
States are ready to contribute for their part up to E30 billion in the
first year to cover financing needs in a joint programme to be designed
with and co-financed by the IMF. Financial support for the following
years will be decided upon the agreement of the joint programme
“In order to set incentives for Greece to return to market
financing, Euro area Members States loans will be granted on
non-concessional interest rates.
“The pricing formula used by the IMF is an appropriate benchmark
for setting Euro area Members States bilateral loan conditions, albeit
with some adjustments. Variable-rate loans will be based on 3-month
Euribor. Fixed-rate loans will be based upon the rates corresponding to
Euribor swap rates for the relevant maturities. A charge of 300 basis
points will be applied. A further 100 basis points are charged for
amounts outstanding for more than 3 years. In conformity with IMF
charges, a one-off service fee of maximum 50 basis points will be
charged to cover operational costs.
“For instance, as of April 9th, for a three year fixed-rate loan
granted to Greece, the rate would be around 5%.
“The Eurogroup is confident that the determined efforts of the
Greek authorities and of its European Partners will allow [the Greek
government] to overcome the fiscal and structural challenges of the
Greek economy. In this context, the Eurogroup welcomes the budget
execution in the first months of the year, which shows that the measures
taken so far are bearing fruit.”
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
[TOPICS: MT$$$$,M$$FX$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
