61bil euros less in 2014-15

The excessive borrowing commitments of our country will be deflating by 61,7bil euros for the 2014-2015 biennium, due to the extension, in a development that might prove to be Greece’s ticket for an earlier exit to the markets. Thus a key reason why the rating agencies threatened with a new downgrade of our debt sustainability, is out of the way so far.

As it seems after Germany’s green light, the 110bil euro will be repaid as in the Irish model in 11 years, with a grace period of 4 and repayment at 7, instead of today’s 3 and 2 respectively.

The final bargaining for the extension will be held on Monday in Brussels, at the meeting of Eurozone Finance ministers, who will prepare the decisions to be made by the leaders of Europe at the Summit on February 4.

This comes after the intense background earlier this week in the special committee meeting in Brussels, at which our country was represented by SOE president Giorgos Zanias.

There, besides the talks about the form and the terms, the Greek side made it possible for this aid not to seem like an isolated case of saving Greece, but a part of a wider plan of confronting the debt crisis all over the Eurozone – as the German minister of Finance Wolfgang Schäuble said yesterday as well.

The economy team feels that this is the first time the entire Eurozone is in practice dealing with the Greek crisis as a European problem and an “attack on the euro”. “Greece will not be the black sheep or the weakest link of the EU”, and neither will it be treated differently from the rest of the group, sources say.

The rating agencies will no longer find Greece to be constantly exposed and vulnerable to crisis and criticism or constantly bank on its exit from the Eurozone, and neither will it play around as easily with the Greek spreads.

All this remains to be seen. With the new data though, the repayment that would have fallen heavy on our shoulders moves forward to 2024. However, we will pay more in taxes. Today we are borrowing at a fluctuating interest rate of around 4%, the reduction of which leads to a stable 5,5%. With the extension, the equivalent fixed rate will be 5,8%.

Practically, with today’s status we will save 6,1bil euros in 2013, 27,61 in 2014, 35 in 2015, 15,5 in 2018-2020, 14 in 2021, and 9bil in 2022-2024. But until then…