BRUSSELS (Reuters) - Euro zone finance ministers and private sector representatives finalized a deal early on Tuesday morning to provide 130 billion euros of new financing to Greece in return for cuts and reforms.
The deal relies on private creditors accepting a loss on the nominal value of their holdings of more than 53 percent, which will help reduce Greece’s debt by around 100 billion euros.
Following are comments from ministers and officials on Tuesday, as EU finance ministers - including those from outside the euro zone - met in Brussels.
”We have tackled the task which was given to us by the decisions of the council. They decided to make a second package, which includes more money than the first one, and it gives more time to the Greeks to restructure.
“The private sector has now been asked to take on and sign the deal that’s on the table by the first week of March. By the end of February Greece has to execute a plan of action. We will examine that again on a Sunday, at a special meeting of the Eurogroup.”
”(There will be) a surveillance mechanism, as well as kind of separate segregation account on which the money is dispersed and the Troika has a special monitoring on. And of course we have the tranches, we have the more permanent supervision of the Troika which we have concluded.
“So we have placed a lot of measures, which we did not typically do in a traditional IMF program, because we have seen Greece has been derailing several times in the past years now. Without these special measures we could not be sure whether or not Greece would implement. So we had a lot of thought about implementation risks, because implementation risks are high in the case of Greece, higher than anywhere else.”
ON THE SIGNIFICANCE OF TUESDAY‘S DEAL:
”I think it’s very good that there is an agreement. It’s a very tough agreement. It has a balance between solidarity and discipline, and it has a lot of steps ahead of us. So I think the way it’s constructed is not just an agreement on paper one night in Brussels, it’s a way of handling the Greek economic problems.
“It’s a very critical time in European history, not only for Greece. Of course there will be a lot of conflict because it’s a very harsh economic plan. It’s also a large loan that’s been given and a large haircut that’s been taken, so of course there will be debate and conflict and this is politics. But of course I also hope that this will be a way to a solution for the Greek economy.”
”What’s been done is a meaningful step forward. Of course the Greeks remain stuck in their tragedy; this is a new act in a long drama. I don’t think we should consider that they are cleared of any problems, but I do think we’ve reduced the Greek problem to just a Greek problem. It is no longer a threat to the recovery in all of Europe, and it is another step forward.
”The risk for Greece of course is that they don’t carry through on their commitments and return to the situation they were in at the start.
“The big risk was that Greece was going to precipitate a crisis in the German, French, Italian banking systems. Now we have a practical guarantee for outstanding Greek bonds, which means that general risks have reduced in a dramatic way.”
”Last night’s developments were very encouraging for the whole European economy. We have Greece taking some very difficult decisions to face up to its debts as other countries like Britain are having to do deal with their debts. We have got the euro zone collectively standing behind their currency which is something that Britain has urged them to do all along.
“Of course the Greek people, the Greek political system has to deliver difficult decisions now, but I don’t think Greece has any other option.”
“The IMF will participate in a new program. It has proposed a sum of 13 billion plus the 10 billion that were not used in the first program. But the final contribution will be made by the IMF board in its next meeting.”
“In the scenarios and calculations are...plenty of forecasts. They have been arrived at as professionally as possible. But naturally, they come with, as Mark Twain said, a significant uncertainty...forecasts are always (to be seen) critically, especially those made in relation to the future.”
“Portugal is a proof that the mechanism of our programs works, even in difficult circumstances.”
“Greece is a specific and unique case which will not be repeated in the case of other euro area countries,” Olli Rehn told a news conference after a deal was struck to keep Greece afloat via new financing of 130 billion euros.
“Besides, both Ireland and Portugal are on track in implementing their programs and these programs help these countries adjust fiscally and reform their economies.”
Reporting by Charlie Dunmore, Robert-Jan Bartunek, Nicholas Vinocur, Annika Breidthardt, Sebastian Moffett and Robin Emmott.