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  • Debt deal done: 10-year grace period, 24.1bn fiscal cushion for Greece

    The deal includes a 24.1bn euro fiscal cushion, a 10-year extension (now through 2032) of the grace period on EFSF loans, and a 10-year extension of the average maturity of Greek bonds by 10 years.

    ΤοΒΗΜΑ Team
    Greece will have its funding needs ensured through 2032, due to the debt relief package decided at yesterday’s much-awaited and reportedly contentious Eurogroup meeting, which lasted for over nine hours.
    The deal includes a 24.1bn euro fiscal cushion, a 10-year extension (now through 2032) of the grace period on EFSF loans, and a 10-year extension of the average maturity of Greek bonds by 10 years.
    European Stability Mechanism (ESM) chief Klaus Regling said that the extension of maturities and the grace period covers loans amounting to 96.6bn euros.
    Eurozone finance ministers also decided to pay the last, 15bn euro tranche, so that Athens can exit the programme with a 24.1bn fiscal cushion, enough to cover funding needs for the next 22 months.
    It was also decided that profits from bonds held by central banks (ANFAs and SMPs) will be returned to Greece in two equal instalments, in June and December, beginning in 2018 and through June, 2022, through a special ESM account, and they will be used to reduce funding needs.
    The deal also provides that Greece will maintain a 3.5 percent primary surplus until 2022, and an average 2.2 percent primary surplus from 2023 until 2060.

    Eurogroup chief Mario Centeno said that Greece will be subjected to enhanced surveillance, with the participation of the IMF, and that the Greek debt is viable according to the analysis of the institutions.

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