Factox: Terms of euro zone emergency loans to Greece

(BestGrowthStock) – Following are key points of an agreement between euro zone finance ministers on a 110 billion euro bailout package for Greece in exchange for an austerity plan.

HOW MUCH MONEY CAN GREECE COUNT ON?

A total of 110 billion euros ($146.5 billion).

WHO WOULD LEND TO GREECE?

All countries using the euro single currency and the International Monetary Fund. Euro zone member states would contribute to the loans according to their respective holdings in the European Central Bank’s capital. For a detailed breakdown see: http://www.ecb.int/ecb/orga/capital/html/index.en.html

BURDEN SHARING AMONG LENDERS

The euro zone would lend 80 billion euros in bilateral loans and 30 billion would come from the International Monetary Fund.

LENGTH OF STAND-BY LOAN PROGRAMME

Three years — until 2012.

FIRST PAYOUT

In 2010 Greece will receive 30 billion euros from the euro zone. Greece will get the first funds before May 19, when it has to pay back 8.5 billion euros in debt.

INTEREST

For the euro zone, variable rate loans would be made on the basis of three-month EURIBOR rates, while fixed-rate loans will be based upon the rates corresponding to EURIBOR swap rates for the relevant maturities.

On top of that, there will be a charge of 300 basis points. An additional 100 basis points will be charged for loans longer than three years. In conformity with IMF charges, a one-time service fee of a maximum 50 basis points will be charged to cover operational costs.

The euro zone loans would carry an interest rate of around 5 percent, Economic and Monetary Affairs Commissioner Olli Rehn said. Interest on IMF loans is smaller, Rehn has said.

HOW GREECE WILL GET THE MONEY

Greece requested the money on April 23, believing it could not finance itself on the markets.

The ECB and the European Commission said the request was justified. Euro zone finance ministers unanimously agreed after yields on Greek bonds soared above 10 percent.

A summit of euro zone leaders on May 7 will rubber-stamp the ministers’ decision. Eurogroup Chairman Jean-Claude Juncker said there was no possibility of the leaders changing the decision.

The leaders are to exchange information on progress in the parliamentary approval process for the loans in their respective countries.

The ECB pays out the money while the Commission acts as a coordinator of the bilateral loans.

The IMF board is to approve its 30 billion euro portion of loans to Greece this week, IMF head Dominique Strauss-Kahn said.

CONDITIONALITY

The loans to Greece are linked to progress in the reform and austerity measures promised by Athens, which will be reviewed on a quarterly basis. The amount of loans to be paid out will be determined after each of such quarterly reviews.

For highlights of the Greek austerity measures, see

Stock Market Report

(Reporting by Jan Strupczewski; Editing by Charles Dick)

Factox: Terms of euro zone emergency loans to Greece