Brussels, 13/03/2012 (Agence Europe) - The Eurogroup made the political decision on Monday 12 March to give the go-ahead to the second Greek bailout, explained Eurogroup chair, Jean-Claude Juncker, but the final decision will not be taken until experts have examined national procedures for the payment of the financial aid and a smooth write-down of Greek bonds. On Tuesday, the ECOFIN Council adopted a decision revising the excess deficit proceedings against Athens, which paves the way for the payment of the first instalment of aid under the second bailout programme and the signature by the European Commission of a memorandum of understanding on the aid criteria. The IMF will decide on its contribution to the aid package on Thursday. IMF Director General Christine Lagarde has talked about the provision of some €28 billion.
The Greek aid programme includes aid of €130 billion from international lenders and €100bn from the private sector. Juncker said this was a second opportunity not to be missed by Greece, pointing out that Greece's future is as a member of the eurozone.
PSI. The Eurogroup is delighted with the better than expected outcome of the Greek bond write-down. The troika of lenders (European Commission, ECB and IMF) say that the public sector involvement (PSI) in the write-down, now including more than 96% of private lenders, will reduce the country's debt from 162% to 117% of GDP by 2020, a greater decrease than the initially planned 120.5%. Juncker said the better than expected result should not be spent by the Greek government, but set aside as a financial buffer. He explained that the private investors would not be receiving compensation in any form, because if the Greek government were to agree to provide damages, then the same problem would be seen in all eurozone countries, with tens of thousands of bankers requesting compensation. (MB/transl.fl)