First, we welcomed the agreement that was reached between Greece and the institutions on policy conditionality. It is to our mind in line with the key objectives set by the euro summit on 12 July, and if implemented with determination -- of course it always boils down to determination -- it will allow the Greek economy to return to sustainable growth.
Secondly, we commended the Greek authorities on the strong commitment shown in the last weeks in the normalisation of working methods with the institutions. [...]
Thirdly, on the policy conditionality, we welcomed the broad scope of the policy measures contained in the Memorandum of Understanding (MoU), as agreed. [...]
On the latter point, there will be later this year, this autumn, an asset quality review and stress test, and on the basis of that, recapitalisation will take place. In that process the bail-in instrument will apply for senior bondholders, whereas the bail-in of depositors is explicitly excluded. You will find this in our statement.
Fourthly, the Eurogroup underlined that a significantly strengthened privatisation programme is a part of the new ESM programme. Therefore it is important that the independent fund which will be set up will be established in Greece at the latest by end-2015. It will be under the supervision of the relevant European institutions. It will take on board the privatisation of state assets and the proceeds of this fund will, for the first €25 billion, completely be used to repay debt and for the second part of the target of €50 billion, it will be 50/50: 50% to repay debt and 50% can be reinvested. This fund will be set up before the end of the year. Proposals have to be made already at the latest by end October 2015. The ownership of this fund will be transferred as soon as possible after the recapitalisation of the banks has taken place later this year.
Fifth, on prior actions. [...]
The overall financing envelope of the agreed ESM programme will amount to €86 billion. This includes a €25 billion bank buffer, which can be available if needed to address potential bank recapitalisation and resolution costs. [...]
On debt sustainability - and this is of course the key issue - a debt sustainability assessment has been provided by the Commission, in a strong liaison with the ECB. The analysis basically concludes that debt sustainability can be achieved through a far-reaching and credible reform programme -- I think we have that in front of us -- and debt-related measures without nominal haircuts, because that was made explicit in the euro summit statement of 12 July. [...]
Finally, we welcomed the intention of the IMF Board to consider further financial support for Greece. They will do so in the autumn. We stressed that such IMF involvement for the Eurogroup is indispensable. [...]
[...] We expect that the ESM Board of Governors which will take the formal decision will be in a position to approve the proposal on Wednesday, 19 August, by the end of the day; and that it would also unlock the initial fist tranche of the programme.
Full speech
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