Irish share of EU rescue deal for Greece could be €500m

Started by Ognir, April 12, 2010, 02:38:26 AM

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Ognir

Ireland have to give these bums 500 friggin million, insane

MINISTER FOR Finance Brian Lenihan will introduce legislation within weeks to empower the Government to advance as much as €500 million in loans to Greece as part of a €45 billion package to help it overcome its debt mountain.

Euro zone countries bowed to relentless market pressure yesterday to strike terms for a €30 billion credit line for Greece, a sum that would be topped up with a further €10-15 billion from the International Monetary Fund (IMF).

Such loans would be granted in the first year of a three-year programme, as Athens tries to raise €53 billion to fund the running of the Greek state and to refinance existing debt. The amounts required in 2011 and 2012 would be decided later, although certain Greek sources suggest the country may ultimately need €80 billion over three years.

While Greek prime minister George Papandreou has not yet asked for the plan to be activated, the deal suggests an attempt to rescue Greece may be imminent. With Athens due to auction short-term debt tomorrow as part of programme to borrow €11 billion by the end of May, the pact represents a last-ditch attempt to persuade investors to continue buying Greek debt.

If market interest rates do not subside in the coming days Mr Papandreou will have to decide whether to ask the EU authorities and the IMF to trigger the rescue mechanism.

Any such intervention would be the first in the euro zone since the start of the euro in 1999, something EU leaders have tried to avoid as Mr Papandreou struggles to convince the markets that his administration can borrow the funds it needs.

"Ireland's participation would require national legislation," Mr Lenihan said after taking part in a telephone conference of euro group finance ministers yesterday.

"The agreement is first and foremost about safeguarding financial stability in the euro area. This will be to the benefit of all member states, including Ireland. The costs of all countries participating, including Ireland . . . would be fully covered."

Government sources said the Minister was likely to bring forward the legislation "in the coming weeks", adding that the State could well make a profit on any loans it extends to Athens. Ireland's contribution – between €450 million and €500 million, according to sources – will be set in line with the State's 1.64 per cent holding of share capital in the European Central Bank.

While the Government currently borrows at about 2.35 per cent over a three-year term, the cost of a three-year fixed-rate loan to Greece under the deal struck yesterday would be about 5 per cent. This would be significantly less than the rate at which Athens currently borrows, which is in excess of 7 per cent.

With Greek borrowing costs at an 11-year high, the deal meets Greece's demand to be able to borrow at rates nearer its euro peers as it continues a big retrenchment programme.

http://www.irishtimes.com/newspaper/fro ... 38322.html
Most zionists don't believe that God exists, but they do believe he promised them Palestine

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