The European Investment Bank is inserting clauses in the loan deals it signs with Greek firms in order to renegotiate debts in case the country exits the euro zone and reverts to the drachma, Kathimerini reported.
According to the newspaper, the first such negotiation took place two weeks ago between the management of Public Power Corp. SA (PPC.AT), the country’s electricity behemoth, and the European Union bank about a 70 million euro loan, in order fund a new natural-gas-powered plant at Megalopoli.
The EIB proposed for the first time two new terms: One clause is the possible renegotiation of the agreement either if Greece left the eurozone or if the common currency area broke up. The second is placing the agreement under English law, in the event of a nonpayment, Kathimerini said.
PPC referred the issue to the Greek Finance Ministry, in order to undertake negotiations with the EIB. The report says, citing sources, that the bank has made it clear to the Greek Finance Ministry that all new contracts signed with Greek companies will include “drachma clauses” and will be under English law.
Those currency-change clauses will not only affect Greece, but will be included in all contracts with countries under bailout programs–Greece, Portugal and Ireland–and will gradually be expanded to all eurozone countries, the report said.
(source: Kathimerini, Dow Jones)