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December 12, 2020

Master Financial Assistance Facility Agreement Greece

Filed under: Uncategorized — Chris Chaten @ 9:20 AM

Greece has requested an extension of the eurozone`s Master Financial Assistance Facility Agreement for a period of six months – the Greek government has officially included for the first time private sector participation (called psI), meaning that the private financial sector has accepted a “voluntary” haircut (finance). It was agreed that the net contribution of banks and insurance companies to Greece`s support would be in addition to an additional EUR 37 billion in 2014. [4] The proposed purchase of Greek bonds from private creditors by the euro bailout fund at face value will weigh at least an additional EUR 12.6 billion on the private sector. [5] On the night of 26-27 October, politicians took two important decisions to reduce the risk of possible contagion from other institutions, including Cyprus, in the event of a Greek default. The first decision was to require all European banks to be 9% fully funded to make them strong enough to cope with the financial losses that could result from a Greek default. The second decision was to use the EFSF from 500 billion euros to 1 trillion euros as a firewall to protect financial stability in other eurozone countries, with a debt crisis looming. Leverage had already been criticized by many parties[7] because it was likely to pay because of the significantly increased risks that the EFSF took. [8] The troika behind the second bailout has set out three requirements that Greece must meet in order to get the money. The first condition was to enter into an agreement whereby all private holders of government bonds would accept a 50% discount, with yields reduced to 3.5%, which would facilitate a reduction in Greek debt of 100 billion euros.

The second condition was that Greece be forced to implement another ambitious austerity plan to bring its budget deficit back to sustainable ground. The third and final condition was that a majority of Greek politicians sign an agreement guaranteeing their continued support for the new austerity plan, even after the April 2012 elections. The money is handed over after it is clear that private sector bondholders are effectively joining the Haircut and after Greece has presented the legal framework to introduce dozens of “previous measures”, from the dismissal of underproducing tax collectors to the adoption of laws to liberalise the country`s closed professions, the strengthening of anti-corruption rules and the preparation of at least two large state-controlled companies by June. [17] [20] In return for the bailout money, Greece accepts a “strengthened and lasting presence” of European observers on the ground. It will also have to repay its debts from a separate receiver account, depositing amounts in advance to meet payments due over the next three months. This operation is overseen by the troika. [17] Yay thesaurus! RT @ManosGiakoumis: Greece would ask for an extension of the Master Financial Assistance Facility instead of the loan agreement Given the uncertainty of developments in greek domestic policy, the first payment was suspended after Prime Minister George Papandreou announced on 1 November 2011 his intention to hold a referendum on the decisions of the eurozone summit. After two days of intense pressure, notably German and French, he finally abandoned the idea. On 11 November 2011, he was replaced as Prime Minister by Loukas Papademos, who was to lead a new transitional government.

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