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Financial assistance to Greece

Greece has been receiving financial support from euro area Member States and the International Monetary Fund (IMF) to cope with its financial difficulties and economic challenges since May 2010.

This support comes in the form of economic adjustment programmes, which include measures to support the Greek government’s efforts to address economic imbalances, tackle social challenges, and pave the way for sustainable economic growth and job creation.

Latest state of play

On 19 August 2015, the European Commission signed a Memorandum of Understanding (MoU) with Greece following approval by the ESM Board of Governors for further stability support accompanied by a third economic adjustment programme. This follows the political agreement reached on 14 August 2015 and paves the way for mobilising up to €86 billion in financial assistance to Greece over three years (2015-2018). Moreover, the Greek authorities signed a Financial Assistance Facility Agreement with the European Stability Mechanism (ESM) to specify the financial terms of the loan. The disbursement of funds is linked to progress in delivery of policy conditions, in accordance with the MoU. These policy conditions are intended to enable the Greek economy to return to a sustainable growth path based on sound public finances, enhanced competitiveness, high employment and financial stability.

A first disbursement of funds under the programme in the amount of €13 bn was made on 20 August 2015; while an additional €10 bn was earmarked immediately for bank recapitalisation and resolution. These funds were intended to allow the Greek state to cover financing needs, make overdue payments, and address financial sector needs in order to mitigate hindrances to economic activity, as well as repay a short-term bridge loan of EUR 7.16bn that was disbursed under the European Financial Stabilisation Mechanism on 20 July 2015.

This new programme follows an 8 July 2015 request by the Greek government, after expiration of the country’s second programme on 30 June 2015. The European Commission published its assessment of the request, done in liaison with the ECB and in accordance with the ESM Treaty, on 10 Julypdf Choose translations of the previous link .

Related documents

The two following documents provided the Board of Governors and euro area ministers with updates following initial assessments to determine Greece's eligibility for an ESM programme (as done on 10 July 2015):

Social impact

In line with President Jean-Claude Juncker's Political Guidelines, the Commission, as a partner in the negotiations, has paid particular attention to the social fairness of the new programme to ensure that the adjustment is spread equitably and to protect the most vulnerable in society, thus improving social cohesion. The Commission has published its assessment of the programme's social impact which concludes that, if implemented fully and timely, the measures foreseen in the programme will help Greece return to stability and growth in a financially and socially sustainable way, and will contribute to meet the most pressing social needs and challenges in Greece.

Supporting Growth and Investment

To complement the adjustment programme and to give its comprehensive reform package the best chance of success, the Commission on 15 July presented a Jobs and Growth Plan for Greece. If the country makes best use of available EU funds, €35 billion could be available to invest in people and businesses by 2020, providing a powerful additional stimulus.

The Commission is also gearing up its offer of technical assistance and expertise, through its new dedicated Structural Reform Support Service. The SRSS, established in July, serves as a hub to mobilise expertise from the Commission services, Member States' administrations and other international organisations to help with the design and monitoring of reforms.

Disbursements

An overview of disbursements of European Stability Mechanism (ESM) financial assistance in the context of the third economic adjustment programme for Greece is provided on the ESM website.

Timeline and Background on Third Economic Adjustment Programme for Greece

  • On 8 July 2015, the Hellenic Republic (‘Greece’) made an official request for stability support – in the form of a loan facility – to the ESM to be used for meeting debt obligations and to ensure stability of its financial system. A separate request for financial assistance was sent to the International Monetary Fund (IMF) on 23 July 2015.
  • On 12-13 July, a Euro Area Summit took stock of the situation and issued a detailed statement on the way forward.
  • On 15 July and 22 July, the Greek authorities passed several sets of legislation, as foreseen in the statement of the Euro Area Summit.
  • On 17 July, the Council approved a Commission proposal for a Council implementing Decisionpdf Choose translations of the previous link  on granting short term financial assistance to Greece and an amendment to the Council Regulationpdf Choose translations of the previous link  establishing a European financial stabilisation mechanism. Also on 17 July, The Eurogroup asked the Institutions to start the negotiations on a MoU detailing the conditionality for a financial assistance facility covering the period 2015-18, in accordance with Article 13 of the ESM Treaty. The work was carried out by the European Commission, in liaison with the European Central Bank, and in cooperation with the International Monetary Fund and the European Stability Mechanism.
  • On 11 August, the Greek authorities and the Institutions reached a staff level agreement on the MoU, and euro area finance ministers endorsed it politically on 14 August.
  • The Greek authorities passed another set of legislation on 14 August (so-called "prior actions").
  • Following approval by national parliaments (where applicable), the ESM board of governors approved the MoU on 19 August. It was then signed by the Commission, on behalf of the ESM, as well as by the Greek government and central bank.

Second Economic Adjustment Programme for Greece

On 14 March 2012, euro area finance ministers approved financing of the Second Economic Adjustment Programme for Greece. The euro area Member States and the IMF committed the undisbursed amounts of the first programme (Greek Loan Facility) plus an additional €130 billion for the years 2012-14. Whereas the financing of the first programme was based on bilateral loans, it was agreed that - on the side of euro area Member States - the second programme would be financed by the European Financial Stability Facility (EFSF), which had been fully operational since August 2010.

In total, the second programme foresaw financial assistance of €164.5 billion until the end of 2014 (the period was later extended to end of June 2015). Of this amount, the euro area commitment amounts to €144.7 billion to be provided via the EFSF, while the IMF contributes €19.8 billion. (This is part of a four-year €28 billion arrangement under the Extended Fund Facility for Greece that the IMF approved in March 2012).

Additionally, when launching the second programme it was agreed that there should be private sector involvement (PSI) to improve the sustainability of Greece's debt. The high participation to Greece's debt exchange offer in spring 2012 made a significant contribution to this end. Out of a total of €205.6 billion in bonds eligible for the exchange offer, approximately €197 billion, or 95.7% have been exchanged.

The release of the disbursements of the financial assistance is based on observance of quantitative performance criteria and a positive evaluation of progress made with respect to policy criteria, detailed in Council Decision 2011/734/EU of 12 July 2011 (as amended in November 2011, 13 March and 4 December 2012) and the Memorandum of Understanding setting the economic policy conditionality.

Implementation

In spring 2012, continued political instability resulted in elections that created a very tense environment, where uncertainty about the possible outcome of a second election led to an acceleration of capital outflows and doubts about the capacity of Greece to implement the adjustment programme. Ultimately, the 17 June election resulted in the formation of a coalition government comprised of three political parties with the mandate to secure Greece's future in the euro area, and hence to implement the economic adjustment programme resolutely. The new government and the administration quickly took up the challenge of identifying and taking the measures needed for catching up on the implementation of the programme. The difficulty to fulfil the conditionality in the immediate aftermath of the elections significantly delayed the disbursement of the next tranches of the loans from international lenders and, while justified, this has taken a heavy toll from the economy.

Against this background, and taking into account the action taken by the authorities, on 26-27 November 2012 the euro area Finance ministers and the IMF agreed to extend the fiscal adjustment path by two years, involving a reduction of the primary surplus target for 2014 from 4.5% of GDP to 1.5% of GDP and an even annual adjustment of 1.5% of GDP until a primary surplus of 4.5% of GDP is achieved in 2016. They also agreed on a package of measures aimed at reducing Greece's debt to 124% of GDP by 2020. The euro area Member States agreed to the following initiatives:

  • A lowering by 100 bps of the interest rate charged to Greece on the loans provided in the context of the Greek Loan Facility.
  • A lowering by 10 bps of the guarantee fee costs paid by Greece on the EFSF loans.
  • An extension of the maturities of the bilateral and EFSF loans by 15 years and a deferral of interest payments of Greece on EFSF loans by 10 years.
  • A commitment by Member States to pass on to Greece's segregated account, an amount equivalent to the income on the Securities Markets Programme (SMP) portfolio accruing to their national central bank as from budget year 2013.

In parallel, Greece informed that it was considering certain debt reduction measures (debt buy-back operation), through public debt tender purchases of the various categories of sovereign obligations.

On 12 December 2012, following the finalisation of the relevant national procedures and after having reviewed the outcome of the debt buy back operation conducted by Greece, the Eurogroup approved the second instalment under the Second Economic Adjustment Programme for Greece. On that basis, Member States authorised the EFSF to release the next instalment for a total amount of €49.1 billion. The disbursement would be made in several tranches. €34.3 billion was paid out to Greece in December 2012. The remaining amount would be disbursed in the first quarter of 2013. First, a further amount of €7.2 billion would be made available to cover bank recapitalization and resolution costs. Second, funds to cover budgetary financing would be disbursed in three sub-tranches, linked to the implementation of specific Memorandum of Understanding milestones agreed by the Troika. The next tranches of €2.0 billion, €2.8 billion and €2.8 billion have been paid out on 31 January 2013, 28 February 2013 and 3 May 2013, following the endorsement by euro area Member States of the Commission's assessment of achievement of the January, February and March milestones respectively.

On 15 April 2013, staff teams from the European Commission, the ECB and the IMF concluded their mission to Greece in the context of the second review of the second adjustment programme. The mission reached staff-level agreement with the authorities on the economic and financial policies needed to ensure the program remains on track to achieve its objectives. On 13 May 2013, the Eurogroup concluded that all necessary elements were in place for Member States to finalise the required national procedures for the approval of the next instalment, which would be disbursed in two sub-tranches. Following the completion of national procedures and the full implementation of the relevant prior actions, the first sub-tranche of € 4.2bn was approved by the EWG and EFSF Board of Directors, and was disbursed on 17 May 2013. The second sub-tranche amounting to € 3.3bn was disbursed on 25 June 2013, following the approval by the EWG and Board of Directors on 13 June 2013. The approval was based on the relevant recommendation made by the European Commission staff, in liaison with ECB and IMF staff, after their assessment of the implementation of the three specific MoU milestones.

The third review of the Second Adjustment Programme was concluded on 8 July 2013, with the staff teams reaching a staff-level agreement, ad referendum, with the Greek authorities. On the same day, the Eurogroup noted with satisfaction that the programme was broadly on track and mandated the EWG and EFSF Board of Directors to approve the next EFSF instalment of €3.0 bn which would take place in two sub-tranches. At the same time, the Eurogroup mandated the EWG and the EFSF to also approve the disbursement of an amount of €2.0bn, equivalent to the income on the SMP portfolio accruing to euro area national central banks, to Greece’s segregated account, to take place in a similar way in two sub-tranches. The first sub-tranche of €2.5bn was approved on 26 July 2013 by the EWG and the EFSF Board following the full implementation of the prior actions; the amount was disbursed on 31 July 2013, after Member States finalised their relevant national procedures. The sub-tranche of €1.5bn income on the SMP portfolio was paid at the same occasion. The second sub-tranche of €0.5bn was approved on 17 December 2013 by the EWG and the EFSF Board following the full implementation of all related milestones; on the same day this amount was disbursed. Similarly to the previous sub-tranche, the sub-tranche of €0.5bn income on the SMP portfolio was paid at the same occasion.

In the context of the fourth review under the second adjustment programme, on 19 March 2014 the teams from the European Commission, the ECB and the IMF reached a staff-level agreement with the authorities on the economic and financial policies needed to ensure the programme remains on track to achieve its objectives.

Based on the assessment by the Commission in liaison with the ECB, the Eurogroup of 1 April 2014 concluded that the necessary elements were in place for the approval of an EFSF instalment of €8.3 billion, to be disbursed in three sub-tranches, conditional to the fulfilment of prior actions and milestones. A first tranche of €6.3 billion was disbursed to Greece on 28 April 2014, following full implementation of the related prior actions and finalisation of Member States' relevant national procedures. Following the implementation of the first set of milestonespdf Choose translations of the previous link  , due by end-May 2014, the EWG and the EFSF Board of Directors approved respectively on 4 and 7 July the disbursement of the second tranche of €1 billion. The disbursement to Greece took place on 9 July 2014 . Similarly, the disbursement of the third and final sub-tranche of €1 billion, was approved by the EWG and the EFSF Board of Directors on 13 August 2014 after the implementation of the second set of milestonespdf Choose translations of the previous link  due by the end of June. The disbursement took place on 14 August.

A full mission of EC/ECB/IMF teams arrived in Athens on 29 September 2014, starting policy discussions in the context of the fifth review of the Second Adjustment Programme for Greece.

Discussions were interrupted in early December 2014, when the process to elect a new Greek president was launched, and, following the procedure provided by the Greek Constitution after the third unsuccessful vote on 29 December, snap parliamentary elections were called for 25 January 2015. This raised significantly political uncertainty, also in view of the scheduled expiry of the Programme by 28 February. The elections saw the success of SYRIZA, which had been until then in the opposition.

After intense negotiations between the newly-elected government and euro area Member states, assisted by the European Commission, the ECB, and the IMF, the Greek government requested on 18 February an extension of the Master Financial Assistance Facility Agreement for Greece. The Eurogroup agreed to extend the programme by four months, underpinned by the commitment of the Greek government to a comprehensive list of reforms and the completion of the national parliamentary procedures. The extension was finalised by a decision of the EFSF Board of Directors on 27 February.

On 27 February 2015, €10.9 billion that were earmarked but not needed for bank recapitalisation were returned by the Hellenic Financial Stability Fund (HFSF) to the EFSF. Accordingly, the outstanding loan amount of the EFSF programme stands at €130.9 billion.

Since then, intensive negotiations took place between the institutions and the Greek authorities to achieve a successful conclusion of the fifth review. However, agreement could not be found. Therefore the review could not be concluded and the second programme expired on 30 June 2015.

Overview of disbursements under the Second Programme

In total, €141.8 billion have been disbursed by the EFSF under the Second Economic Adjustment Programme for Greece. On 27 February 2015, €10.9 billion that were earmarked but not needed for bank recapitalisation were returned by the Hellenic Financial Stability Fund (HFSF) to the EFSF. Accordingly, the outstanding loan amount of the EFSF programme stands at €130.9 billion.

Disbursements under the Second Programme have taken places as follows:

DisbursementDateEFSFIMFTotal
1March – June 2012 / 1741.675.6
2.1December 2012 / 234.3-34.3
2.2January 2013 / 37.2-7.2
2.3January 20132.03.245.24
2.4February 20132.8-2.8
2.5May 20132.8-2.8
3.1May 2013 / 44.21.745.94
3.2June 20133.3-3.3
4.1July 2013 / 52.51.84.3
4.2December 20130.5-0.5
5.1April 2014 / 66.33.69.9
5.2July 20141.0-1.0
5.3August 20141.0-1.0

1/ The first instalment under the Second Programme took place in seven tranches from March to June 2012.
2/ The second instalment amounted to €52.34 billion in total (EFSF and IMF) and was made in several tranches between December 2012 and May 2013.
3/ Amount made available since 28 January 2013 to cover bank recapitalization and resolution costs, disbursed on 31 May 2013 as requested by the Greek authorities.
4/ The third instalment amounted to €9.24 billion in total (EFSF and IMF) and was made in two tranches in May and June 2013.
5/ The fourth instalment amounted to €4.8 billion in total (EFSF and IMF). The disbursement by the EFSF would be made in two tranches. The first tranche of €2.5 billion was disbursed on 31 July 2013. At the same time, €1.5 billion of income on the SMP portfolio accruing to euro area national central banks – not counted in the financial envelope – was also transferred to Greece. The second tranche of €0.5 billion was disbursed on 20 December 2013. Similarly to the previous sub-tranche, €0.5 billion of income on the SMP portfolio accruing to euro area national central banks – not counted in the financial envelope – was also transferred.
6/ The fifth instalment amounted to €9.9 billion in total (EFSF and IMF) and was made in two tranches in July and August 2014.

First Economic Adjustment Programme for Greece

On 2 May 2010, the Eurogroup agreed to provide bilateral loans pooled by the European Commission (so-called "Greek Loan Facility" – GLF) for a total amount of €80 billion to be disbursed over the period May 2010 through June 2013. (This amount was eventually reduced by €2.7 billion, because Slovakia decided not to participate in the Greek Loan Facility Agreement while Ireland and Portugal stepped down from the facility as they requested financial assistance themselves).

The financial assistance agreed by euro-area Member States was part of a joint package, with the IMF committing additional €30 billion under a stand-by arrangement (SBA).

See also: Economies of the EU Member States - Greece

Task Force for Greece

In July 2011, the Commission set up the Task Force for Greece on the request of the Greek Government, and appointed Horst Reichenbach as its Head. The main objectives of the Task Force were:

  • to identify and coordinate the technical assistance that Greece needs in order to meet the terms of the EU/IMF adjustment programme. This is done in close cooperation with Greece and benefitting from input from other Member States;
  • to assist the relevant Greek authorities in defining the details of the kind of technical assistance to be provided; and to recommend legislative, regulatory, administrative and if necessary (re)programming measures for an accelerated take-up of EU funds, focussing on competitiveness, growth and employment.

The Task Force for Greece has been replaced by the Structural Reform Support Service

More information on the Task Force for Greece

Statements and press releases

25/05/2016Eurogroup statement on Greece
09/05/2016

Eurogroup statement on Greece

13/08/2015

Statement on Greece by the European Commission in liaison with the European Central Bank

22/07/2015

Commission Proposal for an amendment to the Council Regulation (EU) No 407/2010 establishing the EFSM

17/07/2015

EFSM: Council approves €7bn bridge loan to Greece

15/07/2015

A new start for jobs and growth in Greece: Commission mobilises more than €35 billion from the EU budget

14/07/2015

Commission's proposal for a Council implementing decision on granting short term Union financial assistance to Greecepdf Choose translations of the previous link 

12/07/2015

Euro Summit statement, Brussels, 12 July 2015

06/07/2015

Greece: Remarks by Vice-President Dombrovskis at the press conference following the referendum

29/06/2015

Transcript of President Jean-Claude Juncker's press conference on Greece

28/06/2015

Information from the European Commission on the latest draft proposals in the context of negotiations with Greece

27/02/2015

Master Financial Assistance Facility Agreement (MFFA)pdf

24/02/2015

Eurogroup statement on Greece

20/02/2015

Eurogroup statement on Greece

16/10/2014

Statement by Vice-President Katainen on Greece

16/07/2014

Joint statement by the European Commission, ECB and IMF on Greece

19/03/2014

Statement by the European Commission, ECB and IMF on the review mission to Greece

20/12/2013

Statement by the Eurogroup President - Recent ruling of Portugal's Constitutional Courtpdf

17/12/2013

Statement by the President of the Eurogroup on Greecepdf

08/07/2013

Eurogroup statement on Greece

08/07/2013

Statement by the European Commission, ECB and IMF on the review mission to Greece

13/05/2013

Eurogroup statement on Greecepdf

15/04/2013

Statement by the European Commission, ECB and IMF on the conclusion of the review mission to Greece

14/03/2013

Statement by the European Commission, ECB and IMF on Greece

21/01/2013

Eurogroup statement on Greecepdf

13/12/2012

Vice-President Rehn's remarks at the Eurogroup Press Conference

13/12/2012

Eurogroup Statement on Greecepdf

04/12/2012

Greece granted two more years to correct its excessive deficitpdf

27/11/2012

Eurogroup statement on Greecepdf

27/11/2012

Statement by President Barroso on Greece

26/11/2012

Vice-President Rehn's remarks at the Eurogroup Press Conference

20/11/2012

Statement on Greece by the Eurogroup President, Jean-Claude Junckerpdf

12/11/2012

Eurogroup Statement on Greecepdf

17/10/2012

Statement of the Troika on the review of the Greek Programme

15/10/2012

One year of Task Force for Greece

05/08/2012

Greece: Statement by European Commission, ECB & IMF Choose translations of the previous link 

02/08/2012

The European Commission welcomes Greek Government structural reform commitment Choose translations of the previous link 

17/06/2012

Statement by Presidents Barroso and Van Rompuy on the result of the Greek elections Choose translations of the previous link 

14/03/2012

Statement on Greece by the President of the Eurogroup, Jean-Claude Junckerpdf

09/03/2012

Statement by Commission Vice-President Olli Rehn on private sector participation in the second Greek programme Choose translations of the previous link 

08/03/2012

Eligibility of bonds issued or guaranteed by the Greek government in Eurosystem credit operations

06/03/2012

Letter from President Barroso to Prime Minister Papademos Choose translations of the previous link 

01/03/2012

Statement on Greece by the President of the Eurogroup, Jean-Claude Junckerpdf
29/02/2012Nominate an EU Commissioner to help return Greece to growth, says Juncker to European Parliament

29/02/2012

Statement by President Barroso following his meeting with Mr Lucas Papademos, Greek Prime Minister Choose translations of the previous link 

27/02/2012

Invitation from President Barroso to Prime Minister Papademos
21/02/2012Statement on Greece by Vice-President Rehn at the Eurogrouppdf
21/11/2011Statement by President Barroso following his meeting with Lucas Papademos, Prime Minister of Greece. (SPEECH 11/778) Choose translations of the previous link 
11/10/2011Statement by the European Commission, the ECB and IMF on the Fifth Review Mission to Greece Choose translations of the previous link 
13/09/2011Questions and Answers on the Task Force for Greece Choose translations of the previous link 
07/09/2011Olli Rehn European Commissioner for Economic and Monetary Affairs Overcoming the Economic Crisis in Greece and Europe "Reset Greece" - ALDE Seminar Brussels Choose translations of the previous link 
02/09/2011Statement by the European Commission, the ECB and IMF on the Fifth Review Mission to Greece Choose translations of the previous link 
27/07/2011Information on IIF offer and debt-buy-back scheme
21/07/2011Euro-area summit agreement on a new financial support programme for Greece
02/07/2011Statement by the Eurogrouppdf
02/07/2011Greece - Commission publishes compliance report and recommends that disbursement should take place
03/06/2011Statement by the EC, ECB and IMF on the Fourth Review Mission to Greece Choose translations of the previous link 
24/02/2011Statement by the EC, ECB and IMF on the Third Review Mission to Greece Choose translations of the previous link 
23/11/2010Statement by the EC, ECB, and IMF on the Second Review Mission to Greece
05/08/2010Statement by the EC, ECB, and IMF on the first review mission to Greece
07/07/2010The economic adjustment programme for Greece - Interim review
17/06/2010EC, ECB and IMF Interim review mission to Greece, press statement Choose translations of the previous link 
31/05/2010The economic adjustment programme for Greece, Occasional Papers no 61
03/05/2010Euro area and IMF agreement on financial support programme for Greece
11/04/2010Eurogroup statement on the support to Greece
26/03/2010Spring European Council statement on Greece

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