Eurogroup meeting: extracts from the press conference by Jean-Claude JUNCKER, President of the Eurogroup and Olli REHN, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro
Lieu: Brussels, Belgium - Council
End production: 21/02/2012 First transmission: 21/02/2012
Early Tuesday, following Eurogroup meeting, Jean-Claude Juncker, President of the Eurogroup and Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro, announced that Eurozone Finance Ministers struck a deal on a second bailout for Greece worth 130 billion euros (172 billion dollars), which also forced banks to take a deeper cut on outstanding loans to Athens.
The EU and the IMF had estimated in October that 130 billion euros, coupled with a 100-billion debt write-off deal between Athens and its private lenders would have been enough to keep Greece afloat.
That calculation was thrown off-kilter as Athens plunged further into recession. Its gross domestic product (GDP) was forecast last week to have contracted by about 7 per cent in 2011.
In order to keep the target to bring Greece's debt down to 120 per cent of its GDP by 2020, Eurozone ministers had to find extra money.
Going into the Brussels meeting, banks had agreed to take a 50-per-cent nominal loss on Greek bonds, but they were later persuaded to suffer greater losses. The haircut on the value of Greek bonds was agreed to rise 53.5 per cent.
The IMF contribution to the program will be determined by the IMF board during the second week of March, added Christine Lagarde.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Speakers arriving in the room
||SOUNDBITE (in English) Jean-Claude Juncker, President of the Eurogroup: The agreed package contains significant efforts from both private and official sector creditors. In this way, the program will respect the parameters set by Heads of State or Government. That is the dept to GDP ratio is expected to reach 120.5 % by 2020 and program financing is estimated to a amount of 130 billion Euros until 2040. Regarding the involvement of the private sector, Greece will launch the bond exchange offer in the coming days.
||Cutaway of cameraman (2 shots)
||SOUNDBITE (in English) Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro: This includes a cut of 53.5% and the several elements of the PSI deal will reduce Greek public debt to the level of 120.5 %of GDP by 2020.
||Cutaway of the audience (2 shots)
||SOUNDBITE (in English) Christine Lagarde, IMF President: All of that will submitted t the board of the IMF be which will take place during the second week of March. And it is the board which will determine by how much the IMF will contribute to the program. I think in doing do it will have in mind the overall program but also additional matters such as the proper setting up of a decent firewall comprising EFS and ESM has considered today but not concluded today.
||General view of the meeting room (3 shots)