Put apocalypse on hold. Bundesbank president Axel Weber has now denied that he said Greece may need €80bn in the years after an eventual rescue by the Eurozone and IMF, contrary to statements reported by the WSJ on Tuesday.
We stand corrected on the €80bn. The figure came from a three-year projection made by the Greek finance ministry, which has now been discarded, Weber says.
But the Bundesbanker still believes that Greece’s long-term liquidity remains unclear, which underlines some key German doubts over the rescue’s activation.
A good thing, then, that numbers on a rescue are firming up elsewhere — beginning with France, as Le Figaro reported on Wednesday (translation ours):
France is ready to release 3.9 billion euros to help Greece, plagued by serious financial difficulties, from early May onwards. Presented at Wednesday’s Council of Ministers by Christine Lagarde, the revised finance bill, stemming from the decisions taken at the Eurogroup of 11 April, will be voted by the National Assembly on May 3 and 4, and the Senate on 6 and May 7. “By supporting Greece, we assure the stability of the euro,” said Lagarde, the Minister for the Economy.
Specifically, France will provide assistance in the form of a direct credit to Greek coffers. It will be a bilateral loan of 3 years at 5%. “It is not that by supporting Greece, we penalise France,” said the Minister of the Economy. “Five per cent is below the market rate, but higher than loan rates for other countries in the euro area” she added.
The Greek deal has to be ratified by national legislation in each of the Eurozone states, since Europe’s portion of the rescue will consist of a set of bilateral loans.
As for the IMF’s portion, some detail has crept out here here — at least according to the German economic minister, who’s cited a €12bn loan, Dow Jones reports via the WSJ.
Great. Just as well everyone’s back on the same page for a Greek rescue. Considering that the yield on Greek bonds had reached 8.22 per cent as of pixel time, the prospect of that rescue is getting ever closer.
Wire flashes quoting Finance Minister George Papaconstantinou suggested Greece could activate the aid package even before the IMF talks drew to a close. The talks are currently slated to end on May 6.
Related links:
Eurogroup statement on terms of Greek loans, 11 April – Reuters
From the annals of international Greek debt management… – FT Alphaville