EU and EFSF finalize plans to provide financial assistance for Portugal and Greece

2011-05-19 23:12:24 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- The European Union and the European Financial Stability Facility (EFSF) finalized and coordinated the plans to provide financial assistance for Portugal and Greece.

The EU, through the European Financial Stabilization Mechanism (EFSM), and EFSF will provide both provide up to €26 billion ($37.05 billion) each to be disbursed over 3 years. Further support will be made available through the International Monetary Fund (IMF) for up to €26 billion ($37.05 billion).

On May 17, the terms and conditions of the financial assistance package were agreed by the Eurogroup and the EU's Council of Economics and Finance Ministers following the formal request for financial assistance made on April 7 by Portuguese authorities.

Furthermore, the EU and EFSF coordinated their issuance calendars which were previously established on the basis of the Irish program to include the support to Portugal.

Between May 23 and July 15, various borrowing operations by EFSM and EFSF will take place to cover the first disbursements to Portugal and Ireland for a total of €15.3 billion ($21.8 billion).

Other disbursements will be made over the rest of the year but subjected to Portugal’s and Ireland's requirements and to quarterly reviews by the Commission in cooperation with the IMF and in liaison with the European Central Bank (ECB).

The EU has already granted €9.6 billion ($13.68 billion) in the first quarter of 2011 while the EFSF has funded €5 billion ($7.12 billion) in the same period. Further benchmark bonds will be issued in the second quarter of 2011.

On May 5, the ECB announced that it will assess Portugal in its economic and financial adjustment program to stabilize its economy. The program contains the necessary elements to achieve a sustainable stabilization of the Portuguese economy.

The European Union and the IMF will provide a total financial support of 78 billion Euros ($114.35 billion) to ensure the success of the project. Previously, Portugal's Prime Minister Jose Socrates announced the application for a financial bailout to the EU.

-- © BNO News All rights reserved 2011-05-19

Latest roumor is that they are going to drop it and the dept will be reduced by 50-60%.

Lets hope so. Let the banks pay.

Tiger