The European Financial Stability Facility (EFSF) announced on Friday that it will not demand immediate repayment of Greece’s loans, while it reserved the right to do so in the future. The decision was made in the wake of Greece’s failure to make a 1.6-billion-euro repayment to the International Monetary Fund (IMF) on Tuesday.
“The EFSF is Greece’s biggest creditor. This default event is cause for deep concern. It breaks the commitment made by Greece to honor its financial obligations to all its creditors and opens the door to severe consequences for the Greek economy and the Greek people. The EFSF will closely coordinate with the euro area member-states, the European Commission, and the IMF on its future actions,” EFSF Chief Executive Klaus Regling said.
The decision to opt for a Reservation of Rights means that the creditor has kept all options open.
The EFSF loans, amounting to nearly 150 billion euros, consist of 109.1 billion euros under the Master Financial Assistance Facility Agreement, 5.5 billion euros under the Bond Interest Facility Agreement and 30 billion euros under the Private Sector Involvement Facility Agreement.