Commission authorises Greek bail out programme
20 November 2008
The Commission approved the Greek package intended to stabilise the markets as a response to the global financial crisis.
The Commission approved the Greek package intended to stabilise the markets as a response to the global financial crisis.
The Greek package consists of:
- A recapitalisation scheme, making available new capital to credit institutions in exchange of preferential shares, to allow them to strengthen their capital base against potential losses. The State will purchase preference shares which are considered as non core tier 1 capital and will be remunerated with 10 % interest.
- A guarantee scheme, covering against remuneration new debt with a maturity between three months and three years, issued during maximum six months after 19 November 2008. Subordinated debt and interbank deposits are excluded from the scheme. The remuneration is aligned with the ECB recommendations.
- A securities scheme, providing against remuneration government bonds to eligible credit institutions to enhance their access to liquidity in particular with the ECB. The bonds are borrowed by the credit institutions against collateral, which has been subject to significant haircuts and against a fee similar to that of the guarantee.
Press release
© European Commission
