Government satisfied with up to eight billion euros from eurozone pandemic package

Finance minister Christos Staikouras welcomed the results of the historic Eurogroup pandemic rescue package which he depicted as a satisfactory but hardly optimal compromise.

Staikouras said that Greece’s three main demands were met.

The first is direct liquidity for businesses which will not be laid out through banks.

The second is a guarantee mechanism endowed with two billion euros.

Thirdly, the interest payments on loans will be subsidised

Staiklouras said that the deal represented a compromise between Northern European and Southern European countries which sought collective Eurozone borrowing with a mutualisation of debt.

Staikouras said that Greece will get between seven and eight billion euros that Greece will receive is essentially borrowing – mainly on EU level – at a very low interest rate.

He stresseed that this does not constitute a precautionary credit line with tough conditionalities which some had advised that Greece request when the third and last bailout package ended in August, 2018.

Foreclosures remain a hurdle

The government however did not manage as it wanted to gain an extension of the framework protecting the primary residence of delinquent debtors through the end of the year.

The framework passed by the Syriza government expired on 31 December and the government secured a four-month extension that ends on 30 April.

The uncertainty affects tens of thousands of borrowers whose primary residence will go on the block if a new arrangement is not possible. Protection from foreclosure is based on strict income and property criteria.

In an interview with ERT state television Staikouras avoided detailing how the government intends to proceed thereafter saying that it involves a collective decision of the government..

“We shall do what we must. We have proved that we are able to act in a timely manner,” he said.

The seven to eight billion euros to which Greece will have access will derive from three funding tools: The SURE programme, the European Investment Bank, and the European Stability mechanism (ESM).

The ESM will have the central role in managing the EU’s total package of over three billion euros.

ESM chief Klaus Regling said that the mechanism is ready to  lay out about 300 billion euros within two weeks once EU leaders seal the deal at a 23 April teleconference summit.

Deep recession on the cards, bolstering employment

In comments made to Mega television Staikouras noted that when and how these funds would be used will depend on several factors, such as the intensity and duration of the crisis, the country’s cash reserves, a future return to capital markets and a series of other programmes running for Greece.

«Based on the current situation, we will not use all tools,» he said, adding that 1.5bn euros are earmarked for bolstering employment and will be disbursed through the SURE programme.

«There is no memorandum,» he said referring to Greece’s three bailout memorandums that required harsh austerity.

Staikouras said there could be no safe estimates and predictions over the damage from the pandemic in Greece as even the eurozone has not yet made a specific projection although the finance ministers at the Eurogroup spoke of five to ten percent drop in GDP eurozone-wide.

Staikouras said that the epidemic lockdown each months costs the Greek economy a 2.5 percent of GDP.

Greece’s recession could be far worse as the government admits that summer tourism – which accounts for about 20 percent of the country’s GDP including its impact on other sectors – is essentially dead.

The finance minister also announced a new package of targeted measures to support the tourism sector.

Finance minister Christos Staikouras welcomed the results of the historic Eurogroup pandemic rescue package which he depicted as a satisfactory but hardly optimal compromise.

Staikouras said that Greece’s three main demands were met.

The first is direct liquidity for businesses which will not be laid out through banks.

The second is a guarantee mechanism endowed with two billion euros.

Thirdly, the interest payments on loans will be subsidised

Staiklouras said that the deal represented a compromise between Northern European and Southern European countries which sought collective Eurozone borrowing with a mutualisation of debt.

Staikouras said that Greece will get between seven and eight billion euros that Greece will receive is essentially borrowing – mainly on EU level – at a very low interest rate.

Foreclosures remain a hurdle

The government however did not manage as it wanted to gain an extension of the framework protecting the primary residence of delinquent debtors through the end of the year.

The framework passed by the Syriza government expired on 31 December and the government secured a four-month extension that ends on 30 April.

The uncertainty affects tens of thousands of borrowers whose primary residence will go on the block if a new arrangement is not possible. Protection from foreclosure is based on strict income and property criteria.

In an interview with ERT state television Staikouras avoided detailing how the government intends to proceed thereafter saying that it involves a collective decision of the government..

“We shall do what we must. We have proved that we are able to act in a timely manner,” he said.

The seven to eight billion euros to which Greece will have access will derive from three funding tools: The SURE programme, the European Investment Bank, and the European Stability mechanism (ESM).

The ESM will have the central role in managing the EU’s total package of over three billion euros.

ESM chief Klaus Regling said that the mechanism is ready to  lay out about 300 billion euros within two weeks once EU leaders seal the deal at a 23 April teleconference summit.

Deep recession on the cards, bolstering employment

In comments made to Mega television Staikouras noted that when and how these funds would be used will depend on several factors, such as the intensity and duration of the crisis, the country’s cash reserves, a future return to capital markets and a series of other programmes running for Greece.

«Based on the current situation, we will not use all tools,» he said, adding that 1.5bn euros are earmarked for bolstering employment and will be disbursed through the SURE programme.

«There is no memorandum,» he said referring to Greece’s three bailout memorandums that required harsh austerity.

Staikouras said there could be no safe estimates and predictions over the damage from the pandemic in Greece as even the eurozone has not yet made a specific projection although the finance ministers at the Eurogroup spoke of five to ten percent drop in GDP eurozone-wide.

Staikouras said that the epidemic lockdown each months costs the Greek economy a 2.5 percent of GDP.

Greece’s recession could be far worse as the government admits that summer tourism – which accounts for about 20 percent of the country’s GDP including its impact on other sectors – is essentially dead.

The finance minister also announced a new package of targeted measures to support the tourism sector.

Finance minister Christos Staikouras welcomed the results of the historic Eurogroup pandemic rescue package which he depicted as a satisfactory but hardly optimal compromise.

Staikouras said that Greece’s three main demands were met.

The first is direct liquidity for businesses which will not be laid  out through banks.

The second is a guarantee mechanism endowed with two billion euros.

Thirdly, the interest payments on loans will be subsidised

Staiklouras said that the deal represented a compromise between Northern European and Southern European countries which sought collective Eurozone borrowing with a mutualisation of debt.

Staikouras said that Greece will get between seven and eight billion euros that Greece will receive is essentially borrowing – mainly on EU level – at a very low interest rate.

Foreclosures remain a hurdle

The government however did not manage as it wanted to gain an extension of the framework protecting the primary residence of delinquent debtors through the end of the year.

The framework passed by the Syriza government expired on 31 December and the government secured a four-month extension that ends on 30 April.

The uncertainty affects tens of thousands of borrowers whose primary residence will go on the block if a new arrangement is not possible. Protection from foreclosure is based on strict income and property criteria.

In an interview with ERT state television Staikouras avoided detailing how the government intends to proceed thereafter saying that it involves a collective decision of the government..

“We have proved that we are able to act in a timely manner,” he said.

The seven to eight billion euros to which Greece will have access will derive from three funding tools: The SURE programme, the European Investment Bank, and the European Stability mechanism (ESM).

The ESM will have the central role in managing the EU’s total package of over three billion euros.

ESM chief Klaus Regling said that the mechanism is ready to  lay out about 300 billion euros within two weeks once EU leaders seal the deal at a 23 April teleconference summit.

In comments made to Mega television Staikouras noted that when and how these funds would be used will depend on several factors, such as the intensity and duration of the crisis, the country’s cash reserves, a future return to capital markets and a series of other programmes running for Greece.

«Based on the current situation, we will not use all tools,» he said, adding that 1.5bn euros are earmarked for bolstering employment and will be disbursed through the SURE programme.

«There is no memorandum,» he said referring to Greece’s three bailout memorandums that required harsh austerity.

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Staikouras said there could be no safe estimates and predictions over the damage from the pandemic in Greece as even the eurozone has not yet made a specific projection although the finance ministers at the Eurogroup spoke of five to ten percent drop in GDP eurozone-wide.

Staikouras said that the lockdown costs the Greek economy a 2.5 percent drop in GDP.

Greece’s recession could be far worse as the government admits that summer tourism – which accounts for about 20 percent of the country’s GDP including its impact on other sectors.

He also annoucned a new package of targeted measures to support the tourism sector, while commenting on whether there could be an extension of an existing regulatory framework of protecting primary residence, he said: «We will do what we have to. We always act timely and with social sensitivity».