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EU agrees Irish bailout, to examine alignment of Greek, Irish debt maturities

Δημοσίευση 1 Δεκεμβρίου 2010, 10:49 / Ανανεώθηκε 27 Ιουνίου 2013, 14:55
EU agrees Irish bailout, to examine alignment of Greek, Irish debt maturities
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Eurogroup and Ecofin finance ministers on Sunday agreed an 85 billion euro bail-out plan for Ireland and the guidelines for a permanent EU support mechanism for resolving debt crises in the eurozone that will replace the existing temporary mecha-nisms concerning the 110 billion euro EU-IMF support loan to Greece and of other eurozone countries respectively. The agreement also calls for "examination of the necessity of aligning the maturities of the financing for Greece to that of Ireland".

Eurogroup and Ecofin finance ministers on Sunday agreed an 85 billion euro bail-out plan for Ireland and the guidelines for a permanent EU support mechanism for resolving debt crises in the eurozone that will replace the existing temporary mecha-nisms concerning the 110 billion euro EU-IMF support loan to Greece and of other eurozone countries respectively. The agreement also calls for "examination of the necessity of aligning the maturities of the financing for Greece to that of Ireland".

Sunday's decisions will be enshrined in Eurogroup and Council decisions to be formally adopted on December 6-7.

A statement issued after the meeting stated that the ministers "unanimously agreed today to grant financial assistance in response to the Irish authorities' request of November 22, 2010" which will be provided "on the basis of a program which has been negotiated with the Irish authorities by the European Commission and the International Monetary Fund (IMF) in liaison with the European Central Bank (ECB)".

The statement also said that "the Eurogroup will rapidly examine the necessity of aligning the maturities of the financing for Greece to that of Ireland".

Further, European leaders, at snap meeting, decided the creation of a Permanent Eurozone Crisis Mechanism to be put in effect in the second half of 2013, which will replace the existing temporary mechanisms that expire in 2013.

The necessity of alignment of the Greek and Irish loan maturities was stressed at a press conference afterwards by Eurogroup president Jean-Claude Juncker and EU Commissioner for economic and monetary affairs Olli Rehn.

"The ministers decided that we should look into the alignment of loan maturities of financing for Greece and that of Ireland. It should now kill off any remaining doubt of the capacity of Greece to repay its debt," Rehn told the press conference.

"All together the EU-IMF programme for Ireland a future European stabilization mechanism with clear rules and the forthcoming prolongation of maturities for Greek loans, constitute decisive elements which will help to dispel any doubt about Europe's will and ability to safeguard the financial stability in Europe," he said.

"As regards interest rates and the pricing policy, we shall apply the IMF equivalent pricing practices in line with the Greek loan package. The precise interest rate will be decided next week and as I said, that will be in line with the IMF standard practices," Rehn added.

According to Greek diplomatic sources, this in practice means that the loan amortization period for Greece will be 11 years, against the current five years under the Memorandum.