Euro-area finance ministers are set to approve the next aid payment due Greece and outline a second rescue after banks lined up behind debt-rollover plans and Greek lawmakers approved a budget-cutting package.
The endorsements by Greece’s creditors and parliament met European Union conditions for preventing a default. Finance chiefs descend on Brussels in three days before a scheduled session July 11-12, where they aim to close this chapter of the debt crisis that has raged for more than a year.
A second package may require about 45 billion euros in new loans, 30 billion euros in Greek asset sales and a contribution of about 30 billion euros from creditors, who have indicated a willingness to roll over some of their holdings, people familiar with the matter have said.
A second package can’t be organized before a report being prepared by the International Monetary Fund, the European Commission and the European Central Bank gives an indication of how much progress Greece has made on overhauling its economic governance, Reynders said.
“We need a very good report from the troika on implementation before any new package can be put in place,” he said.
Finance ministers are also likely to discuss progress the region’s banks and insurers are making toward an agreement on how much Greek debt to roll over in response to politicians’ pressure.
Deutsche Bank AG Chief Executive Officer Josef Ackermann, at a conference in Berlin yesterday with Chancellor Angela Merkel, predicted that financial companies would contribute to help avert a “meltdown.” German and French lenders are the biggest foreign holders of Greek debt and their participation would help the EU meet a goal of getting banks to roll over at least 30 billion euros of bonds.
Under a French proposal, bondholders would agree to roll over 70 percent of their maturing debt into new 30-year Greek bonds with the principal on the new debt guaranteed through Greece investing in zero-coupon bonds of similar maturity. Under a second option, investors would roll over 90 percent of their debt into new five-year bonds with no guarantee.
http://www.bloomberg.com/news/2011-06-30/greece-set-to-get-aid-payment-as-banks-lawmakers-fall-in-line-on-crisis.html
The endorsements by Greece’s creditors and parliament met European Union conditions for preventing a default. Finance chiefs descend on Brussels in three days before a scheduled session July 11-12, where they aim to close this chapter of the debt crisis that has raged for more than a year.
Fifth Tranche
The July 3 finance ministers’ meeting will focus on releasing the fifth tranche of aid from last year’s 110 billion- euro bailout, Luxembourg’s Jean-Claude Juncker, the group’s chairman, said June 29.A second package may require about 45 billion euros in new loans, 30 billion euros in Greek asset sales and a contribution of about 30 billion euros from creditors, who have indicated a willingness to roll over some of their holdings, people familiar with the matter have said.
A second package can’t be organized before a report being prepared by the International Monetary Fund, the European Commission and the European Central Bank gives an indication of how much progress Greece has made on overhauling its economic governance, Reynders said.
“We need a very good report from the troika on implementation before any new package can be put in place,” he said.
Finance ministers are also likely to discuss progress the region’s banks and insurers are making toward an agreement on how much Greek debt to roll over in response to politicians’ pressure.
German Banks
German banks have agreed to roll over the Greek bonds they’re holding that mature through 2014, which amount to about 2 billion euros, Finance Minister Wolfgang Schaeuble said today in Berlin. The country’s so-called bad banks will provide 1.2 billion euros as well, he said.Deutsche Bank AG Chief Executive Officer Josef Ackermann, at a conference in Berlin yesterday with Chancellor Angela Merkel, predicted that financial companies would contribute to help avert a “meltdown.” German and French lenders are the biggest foreign holders of Greek debt and their participation would help the EU meet a goal of getting banks to roll over at least 30 billion euros of bonds.
Under a French proposal, bondholders would agree to roll over 70 percent of their maturing debt into new 30-year Greek bonds with the principal on the new debt guaranteed through Greece investing in zero-coupon bonds of similar maturity. Under a second option, investors would roll over 90 percent of their debt into new five-year bonds with no guarantee.
http://www.bloomberg.com/news/2011-06-30/greece-set-to-get-aid-payment-as-banks-lawmakers-fall-in-line-on-crisis.html
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