EU Adds More Pressure on Greece Ahead of Referendum; EFSF Statement



 

European central bank

One day before Greeks vote in a referendum to accept or reject a bailout deal the EU has offered them, the European Financial Stability Facility issued a statement “reserving its rights to act upon Greece’s default.”

With the Greek Banks closed and Greek citizens equally divided between the “Yes” and “No” camps, the statement adds more pressure to the undecided few.

Here’s the full statement:

The Board of Directors of the European Financial Stability Facility (EFSF) decided today to opt for a Reservation of Rights on EFSF loans to Greece, after the non-payment of Greece to the International Monetary Fund (IMF). Following the IMF Managing Director’s notification of the IMF Executive Board, this non-payment results in an Event of Default by Greece, according to EFSF financial agreements with Greece.

In line with a recommendation by the EFSF’s CEO Klaus Regling, the EFSF Board of Directors decided not to request immediate repayment of its loans nor to waive its right to action – the other two possible options. By issuing a Reservation of Rights, the EFSF keeps all its options open as a creditor as events in Greece evolve. The situation will be continuously monitored and the EFSF will consider its position regularly.

Mr Regling said: “The EFSF is Greece’s biggest creditor. This event of default is cause for deep concern. It breaks the commitment made by Greece to honour its financial obligations to all its creditors, and it 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.”

The EFSF loans concerned are €109.1 billion under the Master Financial Assistance Facility Agreement, €5.5 billion under the Bond Interest Facility Agreement and €30 billion under Private Sector Involvement Facility Agreement.

The Greek non-payment has no influence on the EFSF’s capacity to repay its bondholders. Investors know that EFSF bonds benefit from a robust guarantee structure.

The EFSF Board of Directors is composed of deputy finance ministers and senior officials of each EFSF Member. It is chaired by Hans Vijlbrief, Treasurer-General at the Ministry of Finance of the Netherlands.


6 COMMENTS

  1. Yes, there is quite a bit of threat there. On the other hand, one might say the EFSF takes the most neutral ground possible, given its few options.

  2. Getting nervous over at the EFSF? Like all financial managers they want to hedge their bets and however fix the referendum in their favor with threats, innuendo, hyperbole and other nonsensical drivel which in reality is counter-productive to their ambition of quashing any opposition.

  3. Both of your comments, clearly delineates your ignorance regarding default debt, international law, and several other matters.

    The IMF, and the EFSF can do plenty to Greece. Just ask Argentina. The IMF, and the EFSF, are not going to walk away from Greece’s debt.

    They will file a claim in an international court, and receive a judgement against Greece for the debt owed by Greece. Once they receive the judgement, they both can do whatever is necessary to collect the debt owed, and it does not matter if the Greeks starve to death in the process.

    Since Greece imports over 67% of the products in Greece, it will have to pay countries in cash whom it wants to import their products from. That country is most likely and IMF member. Therefore, the country exporting any products to Greece would have to notify the IMF of any pending payment from Greece. The payment from Greece would be transmitted through the International Banking Transfer System (SWIFT). Guess who would be waiting to seize the Greek payment the second the Greek payment hits the International Banking Transfer System ? That’s right, the IMF, and the EFSF.

    This fact, shows just how dumb both your comments are, from the two of you.

    Argentina lucked out because it is in close proximity to Venezuela for oil. Greece does not have that luxury.

    The Debt owed by Greece will be paid by Greece one way or the other. The easy way……….or the hard way. It does not matter.

  4. I love when our leftists that claim to be against bank bailouts… then flip-flop and accuse the EU of “blackmail” when the EU doesn’t bailout our banks. This erratic behavior sums up the irrationality of far left Syriza and the millions of extreme leftists that voted for a Marxist leader to represent them. Their modus operandi is slanderous accusing those that oppose them of “fascism” (including Merkel, whose a decent intelligent person and not a populist, yet was portrayed as a “Nazi” by our extreme leftists). The irony is that it is our alleged “moderate” left wing that have become extremists. (as witnessed by their election of Marxist Tsipiras)

  5. Utter Crap!!!
    Argentina didn’t pay one cent back when they defaulted and no court injunction was filed. Default is not a due process but rather the cessation of a nation’s arrears. Greece will have a clean slate to print currency while shut out from any temporary future borrowing. As for the IMF, or any other banking institution, seizing transfers from a sovereign nation are deemed as violations of international law and obviously shows simplistic, uninformed views.

  6. I guess the ultra-conservative (easily interpreted as fascist) ideology you obviously aspire to seems more palatable to you. The Greek people deserve better than some diasporic immigrant putting them down for years of governmental manipulation. It might come as a surprise to you but the views you so openly express are the pinnacle populism…

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