Euro-Zone ministers discuss Greece bailout
April 12, 2010 - 0:0
BERLIN (Wall Street Journal) — Finance ministers from the euro zone were scheduled to discuss the technical details Sunday of a bailout plan for debt-ridden Greece, with an aim to rubber-stamp those details, a German government official told Dow Jones Newswires on Saturday.
The official declined to be named.""An agreement of finance ministers from the Eurogroup is planned for tomorrow regarding the technical details to the agreement on Greece from March 25,"" said the official, referring to the agreement by European Union leaders.
EU leaders last month agreed to a bailout plan for Greece, with the EU directing any bailout and providing a majority of its funding through direct loans, while the International Monetary Fund would play a supporting role.
The official stressed that this agreement by the finance ministers wouldn't mean that the plan would be tapped any time soon, but just that the bailout plan would be ready.
The official couldn't say whether the talks would take place via telephone or teleconference. It definitely won't be in person, the official said.
Eurogroup finance ministry officials had been working on details, such as interest-rate conditions that would be given to Greece.
With Greek bond yields recently soaring to record levels of more than 7.58%, more than twice the 3.10% yield on German 10-year bunds, there was rising concern that the EU's rescue plan for the euro-zone member state might have to be tapped. The EU leaders agreed that any aid to Greece must be an ""ultima ratio,"" or last resort, if it becomes clear Greece can't raise enough funds from the market and that loans wouldn't include any element of subsidy and would thus be in line with existing EU laws.
Greece is struggling to refinance €22 billion ($29.69 billion) of debts that mature by the end of May. Even under optimistic scenarios, the country is running a budget deficit in excess of 8% of gross domestic product this year.