Two extra years for Greece to reduce deficit
Wednesday 05 December 2012
The Ecofin Council okayed, on 4 December, measures granting Greece an additional two years to correct its excessive budget deficit, following an agreement reached between the Greek government and the troika of international creditors (Commission, European Central Bank and International Monetary Fund). Athens will now have until 2016 instead of 2014 to bring its primary surplus, which is the surplus not including debt interest payments, to 4.5% of GDP and decrease its government deficit to 3% of GDP. On the basis of a new memorandum of understanding, which comes alongside the extra two years, Athens should be able to get some breathing space in the short term with the probable disbursement by the European Financial Stability Facility of €43.7 billion by the first quarter of 2013. In mid-December, €34.4 billion is to be paid out, mostly to ensure the recapitalisation of Greek banks, with the remaining €9.3 billion to be released in three instalments in the first quarter of next year.