EU leaders weigh plan for Greek exit from bailout
Eurozone leaders are weighing a plan to allow Greece to exit its four-year-old bailout at the end of the year by converting nearly €11bn of unused rescue funds into a backstop for Athens for when it raises cash from the markets on its own.
The plan, which will be discussed at a meeting of eurozone finance ministers in Brussels on Thursday, would allow Antonis Samaras, Greek prime minister, to declare an end to the quarterly reviews by the hated “troika” of bailout monitors ahead of parliamentary elections, which could come as early as March.
The credit line would come from the eurozone’s €500bn rescue fund, meaning it would still require monitoring from Brussels, albeit less onerous than at present. By tapping €11bn originally earmarked for shoring up by Greek banks, eurozone officials hope to avoid political resistance from Germany.
Mr Samaras’s hopes of a “clean exit” from Greece’s €172bn second bailout – which would mean no line of credit or additional outside monitoring – were dashed last month when Greek bonds were sold off in a mini-panic after he announced his intention to finish the bailout at the end of the year without any follow-on programme.
“A completely clean exit is highly unlikely,” said the EU official.
The biggest remaining stumbling block remains the role of the International Monetary Fund in the plan. Unlike the EU, whose Greek bailout runs out of cash this year, the IMF programme is due to run into 2016.
The IMF has become a lightning rod for political anger in Greece – Poul Thomsen, the blunt Dane who heads the IMF’s Greek team, has to travel in Athens with a significant security detail – and Greek political leaders are eager to eject the Fund from the programme.
“It’s not helpful to have them camping in Athens,” said one Greek official, referring to prolonged negotiations over the last bailout review which took nine months to complete.
Remaining resources in the Greek bank recapitalisation fund, known as the Hellenic Financial Stability Fund (HFSF), have long been seen as a possible source of financing for Athens if it were to avoid a third bailout.
Source: FT- EU leaders weigh plan for Greek exit from bailout
