EUROZONE-GREECE/ECOFIN ROUND TABLE Eurozone wrestles over emergency financing for Greece

Record ID: 147017

  • Title: EUROZONE-GREECE/ECOFIN ROUND TABLE Eurozone wrestles over emergency financing for Greece
  • Date: 14th July 2015
  • Summary: BRUSSELS, BELGIUM (JULY 14, 2015) (REUTERS) EXTERIOR OF EUROPEAN COUNCIL SIGN FOR LUXEMBOURG'S PRESIDENCY OF THE EUROPEAN UNION
  • Embargoed: 29th July 2015 13:00
  • Keywords:
  • Location: Belgium
  • Country: Belgium
  • Topics: General
  • Reuters ID: LVAETA6RC5ZEKC16L8GYZBIL8ZMP
  • Aspect Ratio: 16:9
  • Story Text: Eurozone finance officials were struggling on Tuesday (July 14) to find a way of keeping Greece from defaulting on debt repayments to the ECB next week, with up to six options on the table but none that is problem-free.
    Greece needs 3.5 billion euros ($3.9 billion) by Monday to redeem its maturing credit from the European Central Bank. Before this is paid, however, Athens has to settle an overdue payment to the International Monetary Fund of more than 2 billion euros.
    Overall, Greece needs 7 billion euros in July and another 5 billion by mid-August, its official creditors estimate.
    "It's full of traps and snares," the chairman of eurozone finance ministers Jeroen Dijsselbloem said on entering talks of the European Union's 28 finance ministers.
    "We're looking at all the instruments and funds that we could use and all of them seem to have disadvantages or impossibilities or legal objections so we're still working on it," he said.
    Experts have come up with six options for such bridge financing, Finnish Finance Minister Alexander Stubb said, until Greece negotiates a full third bailout of 86 billion euros about five weeks from now.
    Eurozone deputy finance ministers, meeting in what is called the Euro Working Group, will discuss the options on Tuesday before making a recommendation that could be approved in a conference call of the finance ministers themselves later on Tuesday or on Wednesday.
    The options include bilateral loans to Greece, the disbursement of profits made by the ECB on Greek bonds it bought during the crisis, and making use of the funds still available in a mini-bailout fund set up in 2010 - the European Financial Stability Mechanism (EFSM).
    The last option, however, seemed the most problematic. To deploy any of the 13.2 billion euros remaining in the EFSM, all 28 EU governments would have to give their consent, because the fund is backed by the whole EU budget.
    Britain, which refused to allow the EFSM fund to be used for Greece's bailout in the past, restated its objections on Tuesday, calling the option a complete "non-starter".
    EU officials had already made clear this week that they did not expect Britain to contribute to Greece and that Brussels would not press it to. That is not least because the EU executive is trying to avoid fuelling Eurosceptic sentiment in the bloc's second-biggest economy before a referendum that Prime Minister David Cameron has called on EU membership by 2017.
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