Greece is ‘saved’ by giving up some of its sovereignty by accepting a strong and permanent control mechanism, while a Constitution amendment will give priority to repayment of the loan. Instead of one powerful state commissioner many ‘little’ commissioners will be sent to Greece to monitor that the bailout terms are met. These conditions are stated very clear in the statement issued by the 17 euro zone finance ministers after they gave the green light for a second bailout worth 130 billion euro.
1) The Eurogroup will strengthen the EU Task Force with a permanent presence in Athens. This Task Force will consist of experts from other member states. [They will start arriving by next week]
2) Strong monitoring of the measures that the Greek government will take.
3) Setting up a segregated account (escrow account). [ State revenues will gflow into this account].
4) Priority will be given to debt serving payments. This provision will be anchored in the Greek constitution as soon as possible.
5) The ‘haircut” of the Greek bonds (PSI) will have a nominal value of 53.5%. [ Greek debt will be trimmed by 107 billin euro]
“The Eurogroup is fully aware of the significant efforts already made by the Greek citizens but also underlines that further major efforts by the Greek society are needed to return the economy to a sustainable growth path.” (Irish Examiner)
Full Text of Eurogroup Statement Here
Friends at Last…
PS Some Greeks wonder that if the first bailout failed, why the second one would succeed… And some others claim that they are fed up to hear every two months “Greece is saved”.