Euro-area finance ministers authorized the European Financial Stability Facility to issue bonds for the Greek debt swap.
“Ministers authorize the issuance by EFSF of bonds to finance the euro area’s contribution to the PSI exercise and the repayment of accrued interest on Greek government bonds,” Luxembourg’s Jean-Claude Juncker, who leads the group of euro- area finance ministers, said today in a statement. The move followed an assessment that Greece has taken “decisive and swift” action on structural reforms.
Greece’s consolidation measures “will allow the Greek adjustment effort to regain momentum,” Juncker said.
The ministers also authorized the EFSF to implement the Eurosystem collateral enhancement facility, which “entails the provision by EFSF of a buyback scheme for the eligibility of marketable instruments issued or guaranteed by the Greek government for use as collateral in Eurosystem monetary policy operations,” according to the statement.
At the Brussels meeting, the euro-area finance chiefs also agreed on a backstop facility for the recapitalization of Greek banks in case of financial stability concerns.
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