European Stability Mechanism (ESM) Managing Director and European Financial Stability Facility (EFSF) CEO Klaus Regling took to the “newsletter” format on Tuesday to highlight the more-or-less expected short-term debt relief measures for Greece, which were approved by the Eurogroup of ministers last week.
Regling pointed to the “financial solidarity” within the Euro area, as entailed by the measures, while adding that it was the ESM that was responsible for drawing up the measures.
He post reads:
“Last week, euro area finance ministers adopted a series of debt relief measures for Greece. The Eurogroup had promised this in May of this year, as long as the country executed a series of steps to reform its economy. Having passed this hurdle, the debt relief will now be put in place.
“The impact of the measures is sizeable, which is another sign of the financial solidarity that euro area countries are willing to provide. The measures will help to put Greece’s annual debt payments on a more sustainable footing, and support Greece on its way back to the market. There are also some upfront costs, but these will be borne entirely by the country itself.
The ESM was responsible for preparing these short-term measures. This made the past few weeks very busy ones for the ESM. It particularly meant more work for the funding team, even though they already had completed the entire issuance programme in November. The measures will also mean a slight increase in our funding volume for next year.
“This is to cover liquidity needs for some of the different schemes that we will use, such as the bond exchange with the Greek banks, and collateral needs for the swap arrangements,” he noted.
