Thursday , November 26 2020

"Green light" by EFSF for the payment of medium-term debts | Greek economy

The implementation of the package of mid-term debt reduction measures for Greece has been approved by the European Financial Stability Fund (EFSF) Management Council, according to a fund statement.

As stated in the communication, these are the measures adopted by the Eurogroup finance ministers on 22 June 2018 by the Eurogroup.

(a) The mechanism for the gradual removal of interest rates associated with the credits of the second Greek program since 2018,

(b) a further extension of the lending period for interest and amortization over 10 years for EFSF loans worth EUR 96.4 billion; and (c) extending the average maturity of such loans for a period of 10 years.

"We expect that the package of mid-term measures adopted by the ministers in June last month will cause Greece's debt to GDP ratio to fall by about 30 points by 2060. We also expect Greece to reduce the need for gross financing. The Stability Mechanism and EFSF's managing director Claus Regling showed an eight-point increase in the same horizon.

He added that the lifting of the interest margin by 2022 would depend on "the continuation of key reforms" in order to ensure that debt reduction measures would include incentives for Greece to continue implementing agreed reforms. And adapting it to the measures and political commitments adopted for the post-mortem surveillance period of Greece.

Source: RES-EAP

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