- Euro area finance ministers (the Eurogroup) reiterated last night and today their determination to “take coordinated action” to support Greece in the case of emergency. However, they did not shed much additional light on the terms of such aid. The crucial questions of “how much money” and “at what price” Greece would be granted financial aid have been left deliberately unanswered. The head of the Eurogroup, Mr Juencker, said the sum involved had not even been discussed at yesterday’s meeting. The Eurogroup said a decision had been made on the instruments to be used, but that it is not yet the time to unveil it. This is because, they say, Greece does not need any help for now. Implicitly, we believe this means that more details of the rescue package will only be revealed if and when Greece will need it.
- The only additional information we received was that financial help would take the form of bilateral loans between member states and Greece rather than loan guarantees, as was suggested in past weeks. “The proposals would be fully consistent with the Treaty framework and national law and would provide strong incentives to return to markets as soon as possible.” It was also made clear that financial help, if needed, will come from euro area members, so the rest of the EU countries will probably not be involved. Actually, it is still not clear if all euro area states will be involved. The Italian finance minister said today that Italy has not yet decided whether to take part to the initiative, suggesting that the level of agreement within the Eurogroup is still somewhat precarious. The final decision, the Eurogroup said, will rest on the EU head of states.
Greece Emergency Plan Remains Unclear [ citibank capital markets] $EWG
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