Eurogroup approved the deal in Athens and creditors on a new program of assistance – RIA Novosti

© AP Photo / Petros Giannakouris,

BRUSSELS, August 15 – RIA Novosti, Maria Knyazev. Council of Finance Ministers eurozone (Eurogroup) on Friday night approved a third program of external financial aid for Greece – now it will be loans from the European Stability Mechanism (ESM), and possibly the International Monetary Fund (IMF). A maximum of 86 billion euros.

The development of this program was quite fast – just a few weeks, despite the fact that before the Greek authorities and creditors for several months were complicated and ultimately fruitless negotiations on the allocation of money from the second Greek loan program from the EU . This program ended on June 30, and that is why became necessary to discuss a third package finpodderzhki because without it the country risked prevent default and exit the eurozone.

Greece’s national debt is 312 billion euros, is more than 180% of GDP, and Athens can not cope with his service.

It should be noted that in the beginning of July, immediately after the second loan program, a referendum was held in Greece where the majority of citizens have said ‘no’ austerity measures and reforms in the country in exchange for loans from the eurozone and the IMF.

However, the Greek authorities have agreed on new loans from the eurozone in exchange for reforms. On Friday morning, the Greek parliament approved the agreement, and then gave the green light and the Eurogroup.

Follow the implementation of Greece’s reform program will, as before, the European Commission, the European Central Bank and the IMF, said European Commission Vice President Valdis Dombrovskis.

The third loan program Greece has yet to approve a number of eurozone countries. Eurogroup expects the final approval of the new program from the European Stability Mechanism (ESM) will occur until August 19.

The first money is already close

© East News

The total amount of the package of loans Greece amount to 86 billion euros, said the head of the Eurogroup Jeroen Deysselblum at a press conference after a meeting of the council of ministers of finance of the euro area. Loans will be granted for three years.

The funds will be used for debt servicing, maintenance of the banks, including for the full and speedy removal of capital controls, the country’s economy, the restoration of financial stability, said the participants of the Eurogroup.

It is worth noting that the first two loan programs that Greece fully could not do that.

ESM, is expected to provide Greece for August 20 to 13 billion euros, including the repayment of its debts – Greece must make a payment to the ECB’s August 20 without foreign aid the country can not cope.

Then, in September and October, it can receive an additional 3 billion euros, but only if the conditions of the credit program, told the press conference.

Up to 25 billion euros of the total loan package designed to banks: this money should make so-called “bank buffer” to be levied on a separate account ESM parts.

According Deysselbluma, the need for a buffer will determined after the country this fall stress test and evaluate the quality of banks’ assets.

In the near future a separate account ESM is planned to transfer 10 billion euros from the buffer. The funds will help to restore the banking system affected by the imposition of capital controls, said managing director Klaus Regling ESM during a press conference.

Access to the remaining billions of bank buffer Greece could get no later than 15 November, but only After first evaluation by representatives of creditors fulfill the country’s loan program, and subject to completion of stress tests.

Deysselblum did not respond to the question of rates on new loans for Greece. Regling said that it is “a small margin” to the cost of borrowing ESM (the mechanism for lending Greece will raise funds on the market).

Terms and conditions of the program

Greece should receive a primary budget deficit of 0.25 % of GDP this year, but next to enter the surplus of 0.5% and in 2017 – to rise to the level of 1.75% of GDP in 2018 – to 3.5% of GDP.

This will be achieved, in particular, due to budgetary reform and improving tax collection, a message indicates the Eurogroup.

An important element of the program is, and privatization. This item has been in the preceding support program, however, has not brought the expected results.

Under the new program, Greece will have to submit proposals for the formation of a special fund for the privatization of the assets until the end of October, and to create it – before the end of the year, Deysselblum said. This fund will be “under the supervision of the relevant European institutions,” he said.

On the basis of the statements of the Eurogroup, the purpose of the fund – to identify and translate the next three years under his control a series of public assets, which can then be controlled by the fund with the benefit of, or be sold. The purpose of the fund income – 50 billion euros.

The state “as soon as possible after the recapitalization of banks,” the fund will transfer ownership of them, the head of the Eurogroup.

Greece will also have to be reformed the pension system to ensure its sustainability, efficiency and integrity, said the Eurogroup.

Also, by waiting for the reform of the Greek labor market and the commodity market, “to open up the economy to investment and competition as well as to modernize and depoliticize the public sector “According to the Eurogroup.

The country has to go through the recapitalization of banks, including with the use of a number of holders of bonds, but without removing the money from deposits for the purposes of recovery of the banking system.

Participation of the ocean

© AP Photo / Markus Schreiber

The International Monetary Fund (IMF) will take a decision in October to participate in the third package for Greece. Moreover, the Eurogroup considers financial participation fund it prerequisite. In addition, ESM hopes to be able to select not all the declared 86 billion euros of loans from a new program to support Greece, some of the money may come to the IMF.

“I do not expect that the ESM will provide 86 billion euros all, because we expect to join the program and the IMF, although we do not know with any amount of money. This will reduce the funds ESM”, – said Regling.

As the representatives of the Eurogroup, the IMF does not take any obligation to participate in the program to support Greece, a decision – for the Council Fund. According to the head of the Eurogroup, to participate in the third IMF aid package for Greece must be made detailing a series of reforms in the country, as well as an agreement on the sustainability of public debt in Greece.

The question of sustainability of public debt The Eurogroup will discuss in October, confirmed Deysselblum.

The Council of Ministers of Finance is ready to consider various options, such as a longer period of payments on the debt. Reduction of the nominal size of government debt of Greece should not wait, it said in a statement the Eurogroup.