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Eurogroup in Favor of a Precautionary Credit Line to Help Greece

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The Finance Ministers participating at the Eurogroup met yesterday in Brussels and discussed the current economic situation prevailing in the Eurozone. They also discussed the scenarios of Greece exiting its bailout program.
The Eurogroup finance ministers discussed the follow-up to Greece’s economic adjustment program, and supported granting Greece a precautionary credit line.
The details of the credit line and attached conditions will be determined in the coming weeks on the basis of the final review of the current program. The ministers agreed that the IMF should continue to be involved, according to a press release uploaded on the Eurogroup webpage.
“In the light of fragile market sentiment and challenging reforms in the pipeline, ministers strongly supported a precautionary credit line to be extended to Greece,” said the press release.
This could be done through a European Stability Mechanism Enhanced Conditions Credit Line (ECCL) once the current program has ended.
“After Greece completes, in a satisfactory way, the review and wants support, the Eurozone will be willing to help,” stated Eurogroup chairman Jeroen Dijsselbloem.“This will be decided in December,” he underlined.
European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici stated that it is necessary to reach solutions for Greece and Cyprus, and announced that he intends to visit Athens by the end of November.
Klaus Regling, Chief Executive Officer of the European Financial Stability Facility (EFSF) and Managing Director of the European Stability Mechanism (ESM), said that the countries that borrowed during the last few years will have very good economic performances, particularly the three countries that have exited their programs, according to the EU forecast which was unveiled this week.
“Even Greece can expect growth far above the euro area average, like the other countries,” he said, adding that the forecast showed that structural reforms have begun to pay off.
Greek Finance Minister Gikas Hardouvelis has told Reuters on Wednesday, that talks about further debt relief would begin after a final review of Athens’ bailout program, scheduled for December. The next scheduled Eurogroup meeting is going to take place on December 8th.
Concerning the reforms progress in Cyprus, the ministers welcomed the progress made by the Cypriot authorities towards establishing an effective legal framework for private debt restructuring, considering the result should pave the way for the completion of the fifth review of the Cypriot program.
Prior to the meeting, Pierre Moscovici, Commissioner in charge of economic and financial Affairs, said Greece and Cyprus are two economies under different programs and “we need to find a solution for both.”

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