Eurozone agrees second Greek bail-out

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Series Details 21.2.12
Publication Date 21/02/2012
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Eurozone Finance Ministers reached a long-delayed €130bn second bail-out for Greece early on the 21 February 2012 after strong-arming private holders of Greek bonds to take even deeper losses than they had accepted in January 2012.

'The new programme provides a comprehensive blueprint for putting the public finances and the economy of Greece back on a sustainable footing', said Jean-Claude Juncker, chairman of the Eurogroup of Finance Ministers.

Both Mr Juncker and Christine Lagarde, Managing Director of the International Monetary Fund, emphasised at a post-meeting press conference that Greece still had to live up to a series of 'prior actions' by the end of February 2012 before eurozone governments or the IMF can sign off on the new programme.

In addition, the bail-out would come with tough new terms, including a permanent team of monitors in Greece to ensure Athens lived up to the terms of the bail-out deal and an escrow account which Greece would ensure always held three months worth of debt payments. The escrow account would be temporary, however, and Athens had agreed to change its constitution to make debt repayment the top priority in government spending.

Separately, a 'strictly confidential' report on Greece’s debt projections prepared for eurozone finance ministers in February 2012 revealed Athens’ rescue programme was way off track and suggested the Greek government might need another bail-out once the second rescue of February 2012 ran out.

Related Links
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EurActiv, 21.2.12: Greek bailout gambles on mass privatisations, wage cuts http://www.euractiv.com/euro-finance/greek-bailout-gambles-mass-priva-news-511017
European Commission: RAPID: MEMO/12/123: Statement by President Barroso on the agreement reached in the Eurogroup on a second financial assistance programme for Greece http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/123&format=PDF&aged=0&language=EN&guiLanguage=en
European Commission: RAPID: MEMO/12/122: Statement by Vice-President Rehn at the Eurogroup (21.02.2012) http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/122&format=PDF&aged=0&language=EN&guiLanguage=en
EUObserver, 22.2.12: IMF: No money for Greece until Europe boosts its firewall http://euobserver.com/19/115333
EurActiv, 22.2.12: Greek deal seen buying time as tragedy unfolds http://www.euractiv.com/euro-finance/greek-deal-seen-buying-time-trag-news-511035
IMF: Press Release, No.53, 2011: Statement by IMF Managing Director Christine Lagarde on the Meeting of the Euro Group http://www.imf.org/external/np/sec/pr/2012/pr1253.htm
Kathimerini, 23.2.12: Parliament approves details of Greece's debt swap http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_11798_23/02/2012_429565
Spiegel Online International, 21.2.12: Euro Zone Agrees on 130-Billion-Euro Bailout for Greece http://www.spiegel.de/international/europe/0,1518,816590,00.html
To Ethnos, 21.2.12: No room for error (via PressEurop) http://www.presseurop.eu/en/content/article/1533371-no-room-error
BBC News, 21.2.12: Eurozone ministers back 130bn-euro bailout for Greece http://www.bbc.co.uk/news/world-europe-17109044
France24, 21.2.12: Eurozone agrees second €130bn Greek bailout http://www.france24.com/en/20120221-eurozone-seals-second-greece-bailout-debt-crisis-euros-eu-economy
ESO: Background information: The Greek debt crisis of 2010 http://www.europeansources.info/record/the-greek-debt-crisis-key-sources/
ESO: Background information: Eurozone ministers to approve second Greek package http://www.europeansources.info/record/eurozone-ministers-to-approve-second-greek-package/
Kathimerini, 21.2.12: Papademos hails 'historic' deal for new loans, debt reduction http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1095_21/02/2012_429017
Kathimerini, 21.2.12: Eurozone clinches agreement for second Greek bailout http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_21/02/2012_429009
Kathimerini, 21.2.12: Venizelos says Eurogroup deal better than expected http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_21/02/2012_429020
EUObserver, 21.2.12: Eurozone agrees to Greek bail-out, but doubts remain http://euobserver.com/19/115321
EurActiv, 21.2.12: Marathon talks wrap up with minimum Greek deal http://www.euractiv.com/general/marathon-talks-wrap-minimum-gree-news-510992
Council of the European Union: Eurogroup Statement, 21.2.12 http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/128075.pdf
Deutsche Welle, 21.2.12: Eurozone reaches Greek bailout deal after marathon talks http://www.dw.de/dw/article/0,,15753817,00.html

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