Eurozone finance ministers, IMF agree on Greece bailout

27 November 2012 05:08  [Source: ICIS news]

SINGAPORE (ICIS)--Eurozone finance ministers and the International Monetary Fund have agreed on Tuesday to provide further aid to Greece that would include releasing the next tranche of bailout funds for the debt-stricken country.

“The Eurogroup concludes that the necessary elements are now in place for Member States to launch the relevant national procedures required for the approval of the next EFSF [European Financial Stability Facility] disbursement, which amounts to €43.7bn ($56.8bn),” the eurozone said in a statement.

Of the total amount, €10.6bn will be for budgetary financing, while €23.8bn will be in the form of EFSF bonds earmarked for bank recapitalisation, would be paid out in December, it said.

"The disbursement of the remaining amount will be made in three sub-tranches during the first quarter of 2013," the eurozone said, adding that it expects to be in a position to formally decide on the disbursement by 13 December.

Other initiatives being considered to help Greece cut its high level of public debts, include cutting the interest rates on the country’s official loans and extending the debts’ maturity by 15 years to 30 years, and granting Athens a 10-year interest repayment deferral.

IMF managing director Christine Lagarde said the initiatives would “help to bring back Greece’s debt ratio to a sustainable path and facilitate a gradual return to market financing”.

“[Greece’s] debt ratio is expected to decrease to 124% of GDP by 2020 through significant upfront debt reduction measures of 20% of GDP,” she said.

($1 = €0.77)

By: Surinder Malhi
+65 6780 4327

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