Eurogroup confirms 130 bil. loan

Following the agreement reached at the Eurogroup on Monday for the new program to support the country, prime minister Lucas Papademos called this a day of historical importance for the Greek economy.

The package includes a loan of 130 billion and a 53.5% haircut of the Greek debt, as announced in a joint press conference by Jean-Claude Juncker, Olli Rehn and Christine Lagarde.

Eurogroup chairman Jean-Claude Juncker officially confirmed the agreement on an "unprecedented" support plan for Greece which aims to guarantee the country’s stay in the Eurozone.

"This large scale agreement" includes financial assistance and an "unprecedented" debt haircut from private creditors, "so that there will be guarantees for the future of the country in the Eurozone. I am optimistic about the fact that heads of state of the Eurozone will be able, during the next summit in early March, to confirm the enhancement of the EFSF resources and the mechanism that will succeed it, the ESM," Juncker said.

European Economic Affairs Commissioner Olli Rehn said that in return for the support program that will allow the country to avoid default, the supervision of Greece by its creditors will increase. "The Greek support plan is based on one strict condition: it provides for the enhanced supervision of Greece and the imposition of the permanent presence of the EC team" to provide aid to Greece in order to modernise the function of the State.

"I welcome the agreement for Greece"

Using this phrase, Christine Lagarde stated that "the plan must provide room for Greece to improve its competitiveness" and that the process of the bonds exchange will start within the next few days.

In a press conference by the prime minister in Brussels, together with finance minister Evangelos Venizelos, Papademos spoke of crucial decisions for the funding of the Greek economy, giving the country the opportunity to move towards conditions of stability.

"Behind today's decision are the sacrifices and efforts of all the Greeks. We have a few days to do many things. We arrived at a positive result that was neither easy nor obvious," Venizelos said, stressing that it is the first time a government removes the burden by reducing the debt. It was also announced that there will be a new permanent Secretary of Tax and Customs issues.

Marking the government’s next moves, he said that tomorrow the cabinet will discuss and approve the bill which includes the central part of the prerequisite actions as agreed with the Troika, that is the fiscal measures, fiscal and tax administration, pensions, modification of the 2012 budget and actions of a structural nature.

Lastly, he added that the cabinet will also approve the legislation governing the PSI, which starts from tomorrow morning and will be completed in the first week of April.