Greece to receive 109 bn euros in new bailout

22nd July 2011, Comments 1 comment

The 17 countries in the Eurozone have agreed to a 109 billion euro bailout plan until 2014. Banks and other private parties will make a 37-billion-euro contribution to the plan.

As the money from the euro emergency fund will also be used to buy up Greek government bonds against a reduced rate, the private sector’s share will actually amount to 50 billion euros, and will increase by tens of billions of euros until 2020.

Good news Dutch Prime Minister Mark Rutte made these statements after a special summit of Eurozone government leaders. He was excited about the summit’s results, and spoke of good news for Dutch savings and pensions. Mr Rutte said the new bailout plan was necessary to prevent the Greek debt crisis spilling over into other Eurozone countries.

Increased flexibility The Eurozone nations have agreed to a more flexible use of the euro emergency fund. The funds’ 750 billion euros can in future also be used to buy up government bonds of Eurozone countries in financial difficulties. Countries which are not yet in acute difficulties can also request assistance from the fund.

Stricter budget rules The Eurozone leaders want to quickly reach agreement with the European Parliament about stricter measures against EU countries in violation of budgetary rules. At present, the European Parliament is involved in a dispute with a number of member states over the issue because it wants to introduce much stricter rules than in particular France is willing to agree to. Mr Rutte said he was unable to predict whether the European Parliament’s demands would be fully accepted but added that the Netherlands supported its position.

Tough Dutch stance European Commission Chair José Manuel Barroso said he was pleased with the agreement, which took weeks of bickering to achieve. The main point of dispute was the participation of the private sector. Germany, the Netherlands and some other countries demanded that the banking sector would make a contribution to avoid the taxpayers paying all of the new costs. Other Eurozone countries feared negative reactions from the financial markets. The Netherlands adopted a very tough stance right up to the end. “I did not come here for the pleasant company,” Mr Rutte said.

Greek Prime Minister George Papandreou was also happy with the new agreement. The Greek people will now get some relief, he said.


© Radio Netherlands Worldwide


© Radio Netherlands Worldwide

1 Comment To This Article

  • henk krake posted:

    on 24th July 2011, 12:31:53 - Reply

    How can Mr. Rutte be saying that it was a gtood investment for Dutch pensionfunds?
    Holland lent money to a client that is predicted to be still be in "the hole"at a level of 120 % of its GDP (sales) 5 years from now?? and thus will not be able to pay back one penny for the next 5 years and beyond and
    probably will need more money (loaned) to pay the interest to the ECB.
    I hope this is not a "bandage payment " ? to be politically correct?