Master Financial Assistance Facility Agreement Greece

The troika behind the second bailout has set out three requirements that Greece must meet in order to get the money. The first requirement was to conclude an agreement under which all private holders of government bonds would agree to a 50% reduction in debt with yields reduced to 3.5%, which would facilitate the reduction of Greek debt by €100 billion. The second demand was that Greece had to implement another demanding austerity package to put its budget deficit to a lasting shame. The third and final demand was that a majority of Greek politicians sign an agreement guaranteeing their support for the new austerity package, even after the April 2012 elections. [10] Greece asked the eurozone for a six-month extension of the master`s agreement on the financial assistance facility – Greek government official On the night of 26-27 At the EU summit on 10 October, policymakers took two important decisions to reduce the risk of possible contagion from other institutions, in particular Cyprus, in the event of Greek default. The first decision was to require all European banks to reach a capitalization of 9% to make them strong enough to cope with the financial losses that could possibly result from a Greek default. The second decision was to use the €500-1 trillion EFSF as a firewall to protect financial stability in other eurozone countries facing a threat of debt crisis. Leverage had already been criticised by many parties[7] because it is something that taxpayers risk paying for ultimately due to the significantly higher risks that the EFSF assumes. [8] This includes, for the first time, private sector participation (PSI), which means that the private financial sector has accepted a “voluntary” discount (financing).

It was agreed that in 2014 the net contribution of banks and insurance companies to Greece`s aid would be added to €37 billion. [4] The proposed purchase of Greek bonds by private creditors by the Euro Rescue Fund at face value will weigh at least an additional €12.6 billion on the private sector. [5] The second bailout expired on 30 June 2015. [1] It has been replaced by the third economic adjustment programme for Greece. The money will be handed over after it becomes clear that private sector bondholders will actually participate in the haircut and that Greece will have the legal framework it will implement to implement dozens of “previous measures”, from the dismissal of underproductive tax collectors to the adoption of laws liberalizing the country`s closed professions, on strengthening anti-corruption rules and preparing at least two large state-controlled companies for sale by June. [17] [20] In return for the rescue aid, Greece accepts “a reinforced and lasting presence of European observers on the ground”. He must also repay his debts from a special and separate trust account and deposit sums in advance to make payments that will be due over the next three months. This operation is supervised by the troika. [17]. .

. On 21 February 2012, the Eurogroup completed the second rescue plan. At a marathon thirteen-hour meeting in Brussels, EU member states agreed on a new €100 billion loan and a retroactive cut in rescue interest rates to just 150 basis points above Euribor. The IMF is expected to “make a significant contribution” to the loan, but it is not expected to decide on its amount until the second week of March. .