Second Bailout Agreement

The second tranche of 3.3 billion euros was paid on 25 June 2013, after the agreement of the EEC and the Board of Directors on 13 June 2013. The approval was made on the basis of the recommendation of staff from the European Commission, the ECB and the IMF following their evaluation of the implementation of the three specific stages of the programme. Eurozone finance ministers and the IMF agree on a revised bailout deal for Greece, which is expected to include lower interest rates for Greece`s bailout loans and a debt buyback program. The new plan allows Greece to reduce its debt ratio to 124% instead of 120% by 2020, while it pledges to reduce its debt “well below” 110% by 2022. In April 2010, as part of the semi-annual declaration of deficit and debt statistics under the EU excessive deficit procedure, Greece`s public deficit was revised upwards by about 1.5 to 2 percentage points per year for the period 2006-2008, and the deficit for 2009 was estimated for the first time at 13.6% ,[46] the second highest in the EU in terms of GDP (14.3%) and the United Kingdom (11.5%). [47] Greek public debt was estimated at 115.1% of GDP in 2009, the second highest in the EU after 115.8% in Italy. However, these deficit and debt statistics reported by Greece were again published subject to Eurostat, “due to uncertainties about the surplus of social security funds for 2009, the classification of certain public bodies and the registration of over-the-counter swaps”. [48] Greece is awaiting the final tranche of an 86 billion euro bailout of the European Stability Mechanism, the eurozone bailout fund, which it needs in July to repay its debt. At a summit in Brussels on 21 July 2011, eurozone heads of state and government agreed to extend repayment periods for Greek loans (Irish and Portuguese) from 7 years to at least 15 years and to reduce interest rates to 3.5%. They also approved an additional aid package of 109 billion euros, which will be finalised at a later summit with specific content.

[170] On 27 October 2011, the heads of state and government of the euro area and the IMF reached an agreement with the banks under which they agreed to a 50% write-down of (part) of Greek debt. [171] [172] [173] Greece`s second programme, funded by the European Financial Stabilization Fund (EFSF), expired on 30 June 2015. On 8 July 2015, the Greek government submitted a formal request for assistance to the stability of the ESM. The third revision of the second adjustment programme was completed on 8 July 2013, with staff teams having reached an agreement with the Greek authorities at the staff level, ad referendum. On the same day, the Eurogroup found that the programme was largely on track and authorized the EEC and EFSF Board of Directors to approve the next 3 billion euro tranche of the EFSF, which would take place in two tranches. Greece will not receive a blank cheque. Rescue loans are paid in tranches and each tranche of aid is conditional on the Athens government achieving its objectives and completing structural changes in its economy, including the privatization of public assets. In a statement, Jean-Claude Juncker, who, as president of the Eurogroup, heads the finance ministers of the 17 EU members who use the euro, said national governments had formally approved Greece`s second bailout, valued at 130 billion euros ($170 billion). “All necessary national and parliamentary procedures are complete,” he said.

The second programme provided for financial assistance totalling EUR 164.5 billion at the end of 2014.

share post: