Financial Assistance Facility Agreement Greece

The release of aid is based on meeting quantitative performance criteria and a positive assessment of progress on the political criteria set out in the 2011/734/EU Council decision of 12 July 2011 (as amended in November 2011, 13 March and 4 December 2012) and in the agreement establishing the conditionality of economic policy. On 11 August, the Greek authorities and the European institutions reached an agreement at staff level. Eurozone finance ministers approved it politically on 14 August and on the same day the Greek authorities adopted a new legislative package that adopted all the necessary measures for the payment. On 8 July 2015, Greece submitted a formal request for stability assistance in the form of an ESM loan facility to use it: the financial aid agreed by the euro area countries was part of a common package, with the IMF setting an additional EUR 30 billion under a Confirmation Agreement (SBA). On 24 May, the Eurogroup approved a staff-level agreement between Greece and the European institutions, which allowed the ESM to release the next tranche of 10.3 billion euros in financial aid to Greece. The Eurogroup also agreed on a progressive approach to ensure the sustainability of Greece`s public debt. On 2 May 2010, the Eurogroup agreed to grant 80 billion euros in bilateral loans to the European Commission (Greek loan facility – GLF) for the period from May 2010 to June 2013. This amount was then reduced by 2.7 billion euros, slovakia having decided not to participate in the agreement on a loan facility to Greece, while Ireland and Portugal withdrew from the facility because they themselves requested financial assistance. On 27 February 2015, EUR 10.9 billion earmarked for the recapitalization of banks but not necessary was repaid to the EFSF by the Hellenic Financial Stability Fund (HFSF). The current stock of EFSF loans is EUR 130.9 billion.

At the same time, the Council of the European Union has adopted decisions approving the stability assistance programme and the updated budgetary trajectory for Greece. This paved the way for the mobilization of financial aid of up to 86 billion euros over three years (2015-18). The third revision of the second adjustment programme was completed on 8 July 2013, with staff teams having reached an agreement with the Greek authorities at the staff level, ad referendum. On the same day, the Eurogroup found that the programme was largely on track and authorized the EEC and EFSF Board of Directors to approve the next 3 billion euro tranche of the EFSF, which would take place in two tranches. As a result of this repayment, intense negotiations took place between the European institutions and the Greek authorities with a view to concluding the fifth revision, but no agreement could be reached. As a result, the review could not be completed and the second program expired on June 30, 2015. Also on 17 July, the Eurogroup called on the European institutions to begin negotiations for a Memorandum of Understanding setting out the conditions for a financial assistance facility for the period 2015-18, in accordance with Article 13 of the ESM Treaty. The work was carried out by the European Commission and the European Central Bank in collaboration with the IMF and the ESM. On 23 July 2015, a separate request for financial assistance was sent to the International Monetary Fund (IMF).