Greek rescue final decisions to take place on March 9th

Approval for the issuance of guarantees by the EFSF and the refinancing of banks was given by the Eurogroup, but the final decisions on the “overall Greek rescue” will be made in a teleconference of Eurozone finance ministers on March 9th.

Today, the ministers welcomed the progress made by Greece, and thus paved the way for obtaining tangible, practical support, at least in terms of the guarantees given in the whole process of the Greek debt restructuring by the EFSF with the issuance of 30 billion euros to recapitalize banks, as well as a premium for private investors who will participate in the process and would suffer losses from the haircut of 53.5% of the value of the Greek bond debt.

As Eurogroup president Jean-Claude Juncker states, the Europeans noted that in today’s meeting the necessary condition for final approval for the second aid package is the high participation in the PSI and the positive assessment by the Troika of the prerequisite actions in terms of Greece.

The communiqué of the Ministry of Finance:

On his part, Deputy Prime Minister and Finance Minister Evangelos Venizelos in his statement emphasizes that he has signed, with Vice President of the European Commission, Mr Olli Rehn, a memorandum of cooperation for the new program, and afterwards he signed five crucial contracts with EFSF head Klaus Regling.

Specifically:

- The contract for the recapitalization of Greek banks

- The Convention on the guarantees provided by the EFSF to the European Central Bank and the Eurosystem to provide liquidity to the Greek banks during the implementation of the PSI

- The contract for the 30 billion euros, which is funded by the official sector of exchange bonds (sweetener)

- The contract covering the accrued interest of the Greek public debt so far by the EFSF

- The Convention on the form of co-financing between the official and private sectors constitutes one of the key structural features of the PSI.

These contracts were endorsed by the governor of the Bank of Greece, Mr. G. Provopoulos, while the contract for the recapitalization of Greek banks was endorsed by the President of the Board of the Financial Stability Fund, Mr. P. Thomopoulos.

The signing of these contracts is the specialization, formalization and implementation of the decisions of the Eurogroup on February 21, and it sends a message to the private sector, markets and the international community that the official sector supports  Greece in every way and believes in the implementation of the decisions of  October 26, 2011, and February 21, 2012.

Read the announcement here