Greek talks go down to the wire
Greece agreed to strict oversight on spending and to the money, when released, going into an escrow account where creditors would have first call, and only then would whatever is left be used to run the state.
Ireland was watching with interest to see if any of the decisions could be useful in cutting its debt, such as the ECB foregoing profits on their Irish bond holdings.
Brian Hayes, junior finance minister attending the meeting, said that contrary to reports, the Government had made significant progress on the discussions with the ECB and IMF on the Anglo Irish Bank promissory notes.
He said he would raise the issue on the margins of the meeting but said there were no timelines and he would not speculate that the deal would be done before a payment of €3.1bn was due next month.
After eight hours of talks, there was no let-up as they needed to complete the details of the second bailout for Greece in time for funding to be finalised and the threat of default hanging over the country laid to rest.
Negotiations between eurozone finance ministers went on in parallel with representatives of all those who could provide the cut in debt of roughly €6bn, including the private sector, the ECB and central banks.
Germany has vowed not a cent more than the €130bn would be on offer, but with the magic figure of 120% of GDP in debt by 2020 still at 129%, bond holders were being squeezed.
The question of lowering the interest rate was also raised, with a few percentage points over the eurobor Greece is being charged being explored that would cut 1.5 percentage points.
Other options were to increase the cuts on the private sector bondholders to contribute an additional 1.5 percentage points, and have national central banks contribute an additional 3.5 percentage points by taking a cut on the bonds they hold.
Most ministers on their way into the meeting tried to send out a message of mild optimism that the deal could be done. The only person to raise the temperature was the Dutch minister Jens Kees de Jager when he said there would have to be some kind of permanent presence of the troika in Athens.
He also said he favoured an escrow account — an issue that Greece agreed to before the deal was finalised on the new sum of €130bn.
A letter signed by 12 EU leaders, including Taoiseach Enda Kenny, set out a series of measures in trade and to extend the single market they should sign up to at their next summit on Mar 1 to improve growth in the EU.
It said guarantees to rescue banks should be reduced, and “banks, not taxpayers should be responsible for bearing the costs of the risks they take”.
“Each of us recognises the plan we propose requires leadership and tough political decisions. But the stakes are high and action in many of these areas is long overdue.
“With bold and effective action and strong political will we can recover Europe’s dynamism and put our economies back on the path to economic recovery,” said the letter put together by David Cameron, the British prime minister and Mark Rutte, the Dutch premier.
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