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Greece to benefit from Eurogroup decision by 6 billion euros

European Union finance ministers agreed late on Thursday on a 540-billion-euro package of measures to combat the economic fallout of the coronavirus pandemic. “Today we agreed on three safety nets and a plan for the recovery to ensure we grow together and not apart once the crisis is behind us,” Eurogroup President Mario Centeno told reporters after the video conference.

“The decision reached by the Eurogroup should be the starting point of even more ambitious – in the future – European initiatives on dealing with the effects of coronavirus, but also the return to normality,” Finance Minister Christos Staikouras said.

According to Staikouras, this is a new package of measures, both for tackling the current health crisis and for the subsequent reorganisation of European economies.

The package provides for increased funding for companies through the European Investment Bank, the implementation of a temporary programme to protect jobs, and the activation of the precautionary credit line of the European Stability Mechanism (ESM) adapted to the current health conditions.

The aim of this package of measures, totaling more than 500 billion euros, is to strengthen health systems, boost liquidity in the real economy, reduce unemployment and boost social cohesion.

According to Greek media, Greece will benefit from the Eurogroup decision with 6 billion euros.

Greece is gaining access to cheap European funding of more than 6 billion euros in order to deal with the economic effects of the coronation pandemic, notes website bankingnews.

The country will be able to raise:

up to 4 billion euros, or 2% of its GDP by the end of 2019, from the European Support Mechanism (ESM).

at least 1 billion euros from the European Commission’s SURE program of 100 billion euros supporting employment programs. Note that Greece has the highest unemployment rate in the eurozone area.

at least 1 billion euros from the European Bank for Reconstruction and Development’s. the money will be channeled to small and medium-sized enterprises.

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3 comments

  1. I chuckle when I read about the hundreds of billions of relief which is going to be distributed and I am glad that Greece will benefit to the tune of 6 BEUR.

    There were times when Greece couldn’t get any money in the markets or if yes, then only at prohibitive interest rates (5%+). It those days, it was definitely relief when Greece was given much money and at rates of 1% or less by the ESM.

    Today, money is no longer a constraint and interest rates are near zero. So where is the relief? I mean, those 6 BEUR are loans, aren’t they?

    To me, there is only one definition of relief and that is “non-repayable funds”. The US does that for states when they are hit by a hurricane or some other catastrophy and that’s called grants. I am not aware that the wonderful relief packages included any grants. Do they?

    • Precisely, Klaus. The eurozone idea of “relief” is to lend money that has to be repaid. And even this is complained about, with reluctance to do anything much at all. The prognosis for the EU is very bad, given the total absence of solidarity within the eurozone, the massive disparities now exacerbated by the coronavirus crisis, and the inability of national governments to plan their own strategies because these is a moribund ECB which is not allowed to do much at all. Bad times are ahead.

  2. This relief ‘effort’ has been going for years now with the Greeks being dragged deeper and deeper into the economic void they call the EU. Was it 2 or 3 years ago in July, the Greek repayment figure for that period was 126 M€, unfortunately Greece could not meet this payment. In it’s infinite wisdom the EU cartel, instead of waivering some of the debt to help elevate, decided to lend Greece 326M€.
    This meant that EU cartel takes it’s 126M immediately and leaves the remainder for Greece to pay the interest on. It is a scandal.