Wednesday 06 July 2022

Minister admits to keeping quiet about part of Greek deal

Finance minister Jan Kees de Jager has sent a briefing to MPs explaining why he had kept quiet about part of the latest EU rescue package for Greece because of fears about the financial markets reaction.

The omission concerns a temporary guarantee from eurozone countries to the European central bank. This guarantee would be needed if Greece is hit by a selective default and the central bank can no longer accept Greek state debt as surety, the minister says.
‘This temporary guarantee to the ECB for as long as the ‘rating event’ lasts will free the ECB from possible risks in the case of Greek banks being unable to pay back ECB loans which are supported by state debt,’ De Jager wrote.
The minister said he had paid ‘limited attention’ to the guarantee in his briefing of July 25 because of concerns about the reaction of the financial markets. Commission chairman Manuel Barroso, European council chairman Herman van Rompuy and other EU leaders had taken the same line, he said.
The exact size of the guarantee still has to be worked out, but the NRC puts it at €35bn.
This is the second time there has been government misinformation about the size of the rescue deal for Greece. Prime minister Mark Rutte insisted the total package was €109bn, including €50bn from the banks, but this turned out later to be wrong.
The briefing document is on the Financieele Dagblad website

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