SCHEDA - Crisi zona euro, le opzioni sul tavolo

giovedì 21 luglio 2011 09:05

 BRUSSELS, July 20 (Reuters) - Euro zone leaders will meet on
Thursday to discuss a second bailout of Greece and how to stop
the region's debt crisis from spreading to Spain and Italy.
 Below are the main options which officials have been
discussing in the run-up to the summit. 
 The leaders are likely to agree on a new round of financing
for Greece that would extend to mid-2014, supplementing the 110
billion euro ($156 billion), three-year bailout which was
launched in May last year.[ID:nLDE7421WT]  
 The second bailout is expected to total around 110-120
billion euros. Some 30 billion euros of that amount would come
from asset sales by the Greek government; the remainder would be
divided between emergency loans from the European Financial
Stability Facility (EFSF), which is the euro zone bailout fund,
loans from the International Monetary Fund, and a contribution
from the private sector in the form of debt relief. 
 The size of the private sector contribution was originally
estimated at 30 billion euros but is now unclear, as is the form
which the contribution will take. Proposals for four main forms
are being discussed, and officials say that ultimately, a
combination of more than one may be used, or each private
investor may be allowed to choose between them:  
 a) Bond buy-back. The EFSF would lend money to Athens, which
Greece would then use to buy back outstanding bonds, probably at
market prices; some Greek bonds are trading at roughly 50
percent discounts to their face value.  
 This option could conceivably reduce Greece's debt
substantially, although not by enough to solve the problem;
private investors are estimated to hold only about 190 billion
euros of Greece's 340 billion euros of sovereign debt. Analysts
think the debt would have to be roughly halved to 80 percent of
gross domestic product to make it sustainable in the long term.
 By cutting the value of Greek banks' bond holdings, this
option would probably make it necessary for the EFSF to
recapitalise the banks. It would almost certainly prompt credit
rating agencies to assign a limited default rating to Greek
debt, which could destabilise Europe's financial markets as they
speculated about similar ratings for Ireland and Portugal; it
could also prevent Greek banks from using the bonds as
collateral when borrowing from the European Central Bank.   
 b) Bond swap. Germany floated the idea in June; private
investors would be given a certain amount of time to swap their
Greek bonds for new paper of longer maturities -- under the
German proposal, maturities would be lengthened by seven years.
 Banks want the new Greek bonds to be guaranteed by AAA-rated
securities, for example EFSF bonds; euro zone sources say the
amount and form of such credit enhancements are under
 Once again, this option would probably require a
recapitalisation of Greek banks and prompt a limited default
rating to be assigned to Greece.  
 c) Bond rollover. This would aim to have investors
voluntarily maintain their exposure to Greece by purchasing new
bonds as their existing ones expired. Rollover proposals are
complex, though, because of efforts to make them attractive to
investors; one proposal by French banks in June would give
investors back 30 percent of maturing Greek bonds in cash and
reinvest the rest in new Greek paper with 30-year maturities,
which would be guaranteed by AAA paper and carry interest linked
to Greece's economic growth rates. [ID:nL6E7HS29S]  
 This option would probably also trigger a limited default
rating for Greek debt.  
 d) Tax on European financial sector. Funds raised could be
applied to reducing Greece's debt, perhaps through a buy-back;
one euro zone source estimated a tax on all banks in the euro
zone, whether holding Greek bonds or not, could produce up to 10
billion euros a year, or 30 billion over three years.  
 This would have the advantage of appearing unlikely to
trigger a downgrade by credit rating agencies. But banks
strongly oppose the idea and lawyers say it might be difficult
to implement quickly, given the lengthy legislative process in
the European Union and the legal challenges which such a tax
might encounter. Governments may only be proposing this option
as a way to pressure investors into accepting other options.  
 Euro zone finance ministers decided on July 11 that:
"Ministers stand ready to adopt further measures that will
improve the euro area's systemic capacity to resist contagion
risk, including enhancing the flexibility and the scope of the
EFSF, lengthening the maturities of the loans and lowering the
interest rates, including through a collateral arrangement where
 Sources familiar with the talks say all three euro zone
bailout countries, Greece, Ireland and Portugal, may be given
better terms on current and future loans.   
 EFSF lending rates are now 200 basis points above its own
borrowing costs for loans up to three years, and 300 bps for
longer credit. Some sources say bailout loans with maturities of
7.5 years could have their tenors doubled or even quadrupled.  
 Euro zone officials believe that if the private sector
contribution to the second Greek bailout is in the form of a
bond swap or buy-back, EFSF lending terms will not need to be
softened much. But rates would have to be lowered and maturities
extended if there is a rollover or bank tax.  
 A senior euro zone source told Reuters this week that
officials were in talks to let the EFSF buy bonds of euro zone
countries from the secondary market, and to extend flexible,
precautionary credit lines to governments which had sound
economic policies but whose debt was under market pressure.  
 Precautionary EFSF credit lines could resemble flexible
credit lines extended by the IMF to, for example, Mexico and
Poland, where they have been successful. They would allow the
EFSF to act pre-emptively, before a rise in market borrowing
costs of a country had forced it to seek a full-fledged bailout.
 Expanding the EFSF's powers could be a difficult and
time-consuming process, requiring the approval of some national
parliaments in the EU. Germany has in the past opposed proposals
to have the EFSF buy bonds from the secondary market.  
 The EFSF has an effective lending capacity of 440 billion
euros. There are calls for this to be doubled or even tripled,
to ensure the facility has the resources to cope if the crisis
spreads to Spain and Italy. 
 But enlarging the fund would be so controversial, requiring
approvals from some national parliaments, that euro zone
official sources say a decision on it is unlikely to be taken at
this week's summit.  
 Euro zone officials are now putting more emphasis on pulling
Greece out of recession; the negative impact on growth of
austerity steps in the first package is seen as a defect.  
 Greece has received just 4.9 billion of 20.2 billion euros
of EU development funds earmarked for it from 2007 to 2013; last
week it reached a deal with the European Commission to speed
disbursement of the funds. The EU's co-financing rate for
projects will rise to 85 percent from an average 73 percent,
cutting the financing that Athens must provide  [ID:nLDE76D1CL]
 European Commission President Jose Manuel Barroso appointed
a task force on Wednesday to help Greece use the funds.  
 This week's summit may reiterate or expand on these steps.