Raft of measures agreed to help lower Greece's debt burden; cash-strapped country to get ?43.7bn if it implements reforms; IMF sounds note of caution.
Eurozone finance ministers agreed in the early hours of this morning (27 November) steps to help Greece make its huge mountain of debt more sustainable ? and approved the release of its next bail-out instalment.
The finance ministers' third meeting on Greece this month ? this one again lasting more than ten hours ? saw a deal reached under which eurozone member states will make it easier for Greece to meet new debt-reduction targets.
It paves the way for a decision to release Greece's next instalment, totalling ?43.7 billion, to be approved formally when ministers meet on 13 December, providing that national parliaments give their assent before then.
The deal reflects a determination by member states to keep Greece in the eurozone and an acknowledgement that the government in the stricken country has lived up to its commitments to reform.
Olli Rehn, the European commissioner for economic and monetary affairs and the euro, who attended the meeting, said that the decision ?removes the uncertainty that has been hanging over Greece for too long?.
?For the eurozone, this was a real test of credibility and of its ability to take decisions on challenging issues, and it was a test we couldn't afford to fail,? he added.
Jean-Claude Juncker, the prime minister of Luxembourg who presides over meetings of eurozone finance ministers, acknowledged that ?it has been a very difficult deal?.
Part of the difficulties lay in disagreements between eurozone countries and the International Monetary Fund (IMF) ? which provides a proportion of the money to Greece ? over how quickly the country should bring its debt down to sustainable levels, and what help it should get to achieve that.
Christine Lagarde, the managing director of the IMF, said she was happy with the deal, but warned that the IMF would not approve the disbursement of its share of the loans until it had proof that one of the measures that eurozone countries have pledged to take ? a debt buy-back scheme ? was operational.
?Under today's deal, Greece will aim to get its debt-to-gross domestic product (GDP) ratio, which is currently estimated to be about 144%, to 124% by 2020 and to ?substantially lower than 110%? by 2022.
To help Greece meet its targets member states agreed to take a series of measures:
? the rate of interest that Greece has to pay on it loans from eurozone countries will be reduced by 100 basis points;
? profits made on European Central Bank purchases of Greek government bonds ? about ?11 billion ? will be given back to Greece; and
? the maturities on bilateral and eurozone loans will be extended by 15 years and interest payments on eurozone loans by ten years.
In a statement, finance ministers warned that countries would take part in these initiatives only ?in a phased manner and conditional upon a strong implementation by the country [Greece] of the agreed reform measures?.
The bail-out instalment will amount to ?43.7bn and will be paid in three stages, during the first three months of 2013, on condition that Greece implements its agreed reforms, notably a sweeping reform of its tax system in January.
In a statement, Lagarde said: ?Once progress has been made on specifying and delivering on the commitments made today, in particular implementation of the debt buy-backs, I would be in a position to recommend to the IMF executive board the completion of the first review of Greece's programme.? ? ?
? 2012 European Voice. All rights reserved.
st louis university mario manningham mario manningham williams syndrome hoya casa de mi padre corned beef and cabbage
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.