Greece Thanks Eurogroup but Turns Down EUR 30 B Loan Offer

Business » FINANCE | April 11, 2010, Sunday // 19:40
Bulgaria: Greece Thanks Eurogroup but Turns Down EUR 30 B Loan Offer EU commissioner for Economic and Monetary Affairs Olli Rehn (L) and Eurogroup chairman, Luxemburg's Jean-Claude Juncker (R) address a press conference following a video-conference with the European Finance Ministers, in Brussels, Sunday 11 April 2010. Pho

Leaders of the 16 Eurozone nations agreed Sunday to offer Greece a EUR 30 B emergency loan if the Greek side moved to request the money.

The loan package was announced by Luxembourg Prime Minister, Jean-Claude Juncker, who explicitly made it clear that the loan mechanism will be activated only if the Greek government decides to go for it.

The price of the loans will be fixed using IMF formulas, and will be about 5%. Juncker said the financing would be "completed and co-financed" by the International Monetary Fund. While European Commissioner for Economic and Monetary Affairs Olli Rehn announced the IMF will clarify its exact part in the loan proposal.

Greece’s total debt amounts to EUR 300 B, and it has to make interest debt payments of EUR 11,5 B by May 2010.

"The Eurogroup is confident that the determined efforts of the Greek authorities and of its European partners will allow [it] to overcome the fiscal and structural challenges of the Greek economy," a statement of the Eurozone countries said.

Shortly after the loan package was announced, it was welcomed by the Greek Finance Minister George Papaconstantinou.

However, Papaconstantinou made it clear that Greece had not requested the loan meaning that the bailout mechanism would not be activated.

He stressed the deal showed EU member states have recognized Greece's efforts to reduce its budget deficit.

The 16 Eurozone ministers held a conference call Sunday to decide on their aid for Greece which they pledged in March in accord with the IMF.

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Tags: Jean-Claude Juncker, Olli Rehn, IMF, loan, bailout, Eurogroup, greece, Eurozone, George Papaconstantinou
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