Update: Greek PM Says Grexit Scenarios Dead, “Blackmail” Over
–Adds Comments By Finance Minister Yiannis Stournaras
BRUSSELS (MNI) – Greece’s Prime Minister Antonis Samaras sought to
end any speculation about the troubled country’s possible exit from the
Eurozone, saying that the decision taken by the Eurogroup on Thursday to
pay a long-overdue loan installment to Greece will give it much
As a result of the Eurozone finance ministers’ decision to release
the aid money, Greece will receive E52.5 billion over the next three
“The funds, coming in conjunction with the necessary structural
reforms, create space for optimism about the future,” Samaras said at a
press conference here ahead of the EU leaders’ summit.
“More than E40 billion out of the total amount will remain in
Greece and the rest will contribute to a E20 billion reduction in the
public debt,” Samaras added, referring to the bond buy-back conducted by
the Greek debt agency earlier this week.
Greece’s European partners, through the European Financial
Stability Facility, is loaning Greece E11.3 billion to buy back
privately held government bonds with a total nominal value of about E32
billion at steeply discounted prices equal, on average, to about
one-third the face amount.
The Eurogroup had originally approved only E10 billion for that
purpose, but because Athens was obliged to pay a slightly
higher-than-expected price to buy the bonds back, it required a bump in
the amount provided by the EFSF.
With Thursday’s deal, Greece can no longer be “blackmailed,” and
“the black cloud hanging over Greece is dissolving,” Samaras declared.
“Some thought that we were not negotiating. They still refuse to
believe that the interest rates on our loans have been reduced and
profits [on Greek sovereign bonds] returned by the ECB,” Samaras said.
“We got the best deal any troubled country could possibly get from the
EU. The amount is unprecedented.”
The Greek premier said he was committed to returning to the Greek
people what the state owes them, thus paving the way for unblocking tax
rebates and making good on government arrears to hospitals, pharmacies
and other businesses.
Greek Finance Minister Yiannis Stournaras, who attended the press
conference, noted that the first loan tranche, to be released next week,
will amount to E34.3 billion, of which E16 billion will fund the
recapitalization of Greek banks, E7 billion will cover state arrears and
operational budget expenses, and the remaining E11.3 billion in will
finance the bond buy-back.
In January, Greece will receive another E7.2 billion for additional
bank recapitalization and around E11 billion more for budget needs,
Stournaras said. He asserted that other elements of the Eurogroup
decision – namely, lower interest rates on loans and the return of ECB
bond profits – “is a form of extending our funding.”
The minister argued that it was now time for Greece to start
implementing the reforms and new deficit cuts it has agreed to. The
primary goal is to push an ambitious privatization program, reform the
tax system and pursue unfinished structural reforms.
However, a senior Greek government official speaking to reporters
after the briefing said that after next week’s payment of the E34.3
billion loan tranche, “nothing is certain.”
“All future loan tranches are attached to obligations we must
fulfill, and these tranches will be frozen if the Eurogroup and the
[creditors'] inspectors detect delays,” the official said.
Specifically, he noted that January’s tranche will be disbursed
only if the tax reform bill has been passed. The vote on that bill is
expected to take place after the Christmas holidays, the official said.
–Brussels newsroom, email@example.com