We Have A New New New Greek Deal - Full Details And Live Webcast

Tyler Durden's picture

The words commitment, support, hard-work, and reform are popular among these talking heads. Here are the details and the press conference - though do NOT try and use your calculator.

As Lagarde adds: "The initiatives include Greek debt buybacks, return of Securities Market Programme (SMP) profits to Greece, reduction of Greek Loan Facility (GLF) interest rates, significant extension of GLF and European Financial Stability Facility (EFSF) maturities, and the deferral of EFSF interest rate payments."


Basic provisions (via Citi's Steve Englander) are:

1)     About EUR 35bn to be paid out to Greece in December, about EUR9 bn in three Q1 tranches

2)     Greece still has to meet some conditions and pass a tax reform and fulfill conditions on buyback but goal seems to be to have December 13 final decision on disbursement

3)     Greek debt to be reduced to 124% of GDP by 2020, in absolute terms, ambition is to cut Greek debt by EUR40-45bn.

4)     Rates on official loans to Greece are cut; ECB returns profits on Greek bonds bought at a discount and paid at face value

5)     Offer to buy back debt at 35 cents on the EUR

6)     EFSF defer interest payments for 10 years and extends loan maturities by 15 years

7)     No forgiveness on face value of official loans (but lower rates would imply an NPV cut)

8)     Additional debt relief possible down the road if Greece meets austerity targets

9)     Some rumors of a further write-down down the road if Greece complies with austerity program

10)  Many additional avenues of possible help to Greece, contingent on austerity, are being mooted

11)  Greece has to sequester revenues in advance to meet debt servicing needs


Live Webcast:


27 November 2012 Eurogroup statement on Greece

The Eurogroup recalls that a full staff-level agreement has been reached between Greece and the Troika on updated programme conditionality and that, according to the Troika, Greece has implemented all agreed prior actions.

The Eurogroup in particular welcomes the updated assessment of the Troika that Greece has implemented in a satisfactory manner a wide ranging set of reforms, as well as the budget for 2013 and an ambitious medium term fiscal strategy 2013-16.

The Eurogroup noted with satisfaction that the updated programme conditionality includes the adoption by Greece of new instruments to enhance the implementation of the programme, notably by means of correction mechanisms to safeguard the achievement of both fiscal and privatisation targets, and by stronger budgeting and monitoring rules. Greece has also significantly strengthened the segregated account for debt servicing. Greece will transfer all privatizations revenues, the targeted primary surpluses as well as 30% of the excess primary surplus to this account, to meet debt service payment on a quarterly forward-looking basis. Greece will also increase transparency and provide full ex ante and ex post information to the EFSF/ESM on transactions on the segregated account.

The Eurogroup again commended the authorities for their demonstrated strong commitment to the adjustment programme and reiterated its appreciation for the efforts made by the Greek citizens. The Eurogroup noted that the outlook for the sustainability of Greek government debt has worsened compared to March 2012 when the second programme was concluded, mainly on account of a deteriorated macro-economic situation and delays in programme implementation The Eurogroup considered that the necessary revision in the fiscal targets and the implied postponement of a primary surplus target of 4.5% of GDP from 2014 to 2016 calls for a broader concept of debt sustainability encompassing lower debt levels in the medium term, smoothing of the current financing hump after 2020 and easing of its financing.

The Eurogroup was informed that Greece is considering certain debt reduction measures in the near future, which may involve public debt tender purchases of the various categories of sovereign obligations. If this is the route chosen, any tender or exchange prices are expected to be no higher than those at the close on Friday, 23 November 2012.

The Eurogroup considers that, in recapitalising Greek banks, liability management exercises should be conducted in respect of remaining subordinated debt holders so as to ensure a fair burden sharing.

Against this background and after having been reassured of the authorities' resolve to carry the fiscal and structural reform momentum forward and with a positive outcome of the possible debt buy-back operation, the euro area Member States would be prepared to consider the following initiatives:

A lowering by 100 bps of the interest rate charged to Greece on the loans provided in the context of the Greek Loan Facility. Member States under a full financial assistance programme are not required to participate in the lowering of the GLF interest rates for the period in which they receive themselves financial assistance.

  • A lowering by 10 bps of the guarantee fee costs paid by Greece on the EFSF loans.
  • An extension of the maturities of the bilateral and EFSF loans by 15 years and a deferral of interest payments of Greece on EFSF loans by 10 years. These measures will not affect the creditworthiness of EFSF, which is fully backed by the guarantees from Member States.
  • A commitment by Member States to pass on to Greece's segregated account, an amount equivalent to the income on the SMP portfolio accruing to their national central bank as from budget year 2013. Member States under a full financial assistance programme are not required to participate in this scheme for the period in which they receive themselves financial assistance.

The Eurogroup stresses, however, that the above-mentioned benefits of initiatives by euro area Member States would accrue to Greece in a phased manner and conditional upon a strong implementation by the country of the agreed reform measures in the programme period as well as in the post-programme surveillance period.

The Eurogroup is confident that, jointly, the above-mentioned initiatives by Greece and the other euro area Member States would bring Greece's public debt back on a sustainable path throughout this and the next decade and will facilitate a gradual return to market financing. Euro area Member States will consider further measures and assistance, including inter alia lower co-financing in structural funds and/or further interest rate reduction of the Greek Loan Facility, if necessary, for achieving a further credible and sustainable reduction of Greek debt-to-GDP ratio, when Greece reaches an annual primary surplus, as envisaged in the current MoU, conditional on full implementation of all conditions contained in the programme, in order to ensure that by the end of the IMF programme in 2016, Greece can reach a debt-to-GDP ratio in that year of 175% and in 2020 of 124% of GDP, and in 2022 a debt-to-GDP ratio substantially lower than 110%. As was stated by the Eurogroup on 21 February 2012, we are committed to providing adequate support to Greece during the life of the programme and beyond until it has regained market access, provided that Greece fully complies with the requirements and objectives of the adjustment programme.

The Eurogroup concludes that the necessary elements are now in place for Member States to launch the relevant national procedures required for the approval of the next EFSF disbursement, which amounts to EUR 43.7 bn. EUR 10.6 bn for budgetary financing and EUR 23.8 bn in EFSF bonds earmarked for bank recapitalisation will be paid out in December. The disbursement of the remaining amount will be made in three sub-tranches during the first quarter of 2013, linked to the implementation of the MoU milestones (including the implementation of the agreed tax reform by January) to be agreed by the Troika.

The Eurogroup expects to be in a position to formally decide on the disbursement by 13 December, subject to the completion of these national procedures and following a review of the outcome of a possible debt buy-back operation by Greece.

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fonzannoon's picture

BCO I usually send this link to illustrate the "I told you so" aspect of things. Maybe it will help.


Cangoroo's picture

Anyway in 2 months it is nuts, next data

Being Free's picture

"The Eurogroup considers that, in recapitalising Greek banks, liability management exercises should be conducted in respect of remaining subordinated debt holders so as to ensure a fair burden sharing."

I don't know, maybe it's just me, but I think I'd skip the toe touches.

magpie's picture

Spike to 1.40 or fall to 1.20 already

vote_libertarian_party's picture

I think some reporter just asked LeGard "How big do you think these bond buys will need to be be?"  And she gave him a snooty "I don't have to answer that."


It sounds like no details again as to WHO IS EATING THE LOSSES.

Cangoroo's picture

Bondholders will find her quite sexy. Best advice of ZH to buy these Greek bonds under common law.

Winston Churchill's picture

Everyone except the IMF, ECB, and the European bankers.

exartizo's picture



So Greece is still getting

Euros Galore!

Thanks to the Eurogroup

All bought and paid for


No market reset

No market clear here

Just continuous unending

Bullshit and fear


If Greece goes down hard

Surely the Euro is doomed

So they’ll fight to the death

To keep it exhumed


Yes “There’s no trouble here!”

They proudly proclaim

The Ponzi keeps going

We all know the game


Market Distortions?

Just simply aren’t there

Lies, evil and Greed?

Just don’t you dare


“Why, The Euro is sound!”

They gladly proclaim

While their countrymen

Look on in disdain

woggie's picture

the beast is on the gobble
and all that matters is we're all headed for it's belly

Aurora Ex Machina's picture

I'm not getting this:

Linkspamming; I get.

Blogspamming; I get.

Rampant racist spamming; I get [skews Google rankings, lowers search algo priority]


Fat old man annoyed at Obama: Don't get.

Flounder's picture

so this is complete make believe like the US deficit will be cut, the post office will turn a profit and the Greek economy will grow enough to pay everybody back

mess nonster's picture



















Cangoroo's picture

Long, Greek bank shares?

max2205's picture

Best news, renews, new news all day

John Law Lives's picture

How many long-term jobs does this create?  If the answer is next to zero, this is BS.

Central Bankster's picture

The mistake in your reasoning, is that you suppose that this is done in the interest of lower/middle class (employment).  Instead, you must realize everything is done to save the banks.  Priced to market, the banking system is insolvent.  Bailout after bailout until there exists enough equity for the banks to be solvent... that is the plan.

John Law Lives's picture

"The mistake in your reasoning, is that you suppose that this is done in the interest of lower/middle class (employment)."

I never for one second supposed that this was done in the interest of Mr. and Mrs. Joe Sixpackopoulos.


"Instead, you must realize everything is done to save the banks."

I wouldn't be a frequent participant on this site if I hadn't come to that conclusion long ago.

papaswamp's picture

I didn't think Europe could get any worse and people suckered anymore...but...I was wrong. Germany...Greece just went on vacation..again...on your dime. And probably again.

Zgangsta's picture

If you can create money, then you can create any intangible thing that you want.

I just designed a delicious birthday cake for myself in Photoshop.  All that's left is the trivial step of figuring out a way to eat it.

CrashisOptimistic's picture

Not that hard.  In Photoshop, make the cake 3D, then open it and stuff it full of dollars.  Then print it all out, go to the store and buy a cake.

holdbuysell's picture

Let me guess...crickets are chirping at ISDA

monopoly's picture

All we need is a review one more time and then it is done. Then maybe, we will need a review of the review and promise, promise, only one more review if the review shows that another review is needed. Then.... it.... is.... a.... done.... deal.... We....promise. 

blunderdog's picture

     correction mechanisms to safeguard the achievement of both fiscal and privatisation targets, and by stronger budgeting and monitoring rules.

Cool.  That's what we did in the USA, too.  It's sure to work.  We call it a "fiscal cliff."

We're on-track so far...

Yellowhoard's picture

Never before have so many owed so much to so few.

magpie's picture

Wanderer, if you tarry at this place tell of the bailouts*

*Wanderer, kommst du nach Sparta, verkündige dorten, du habest
Uns hier liegen gesehn, wie das Gesetz es befahl.
in Merkelese

chump666's picture

*BRUSSELS--The German government hopes to get its parliament's approval for the latest deal to extend Greece's bailout package by the end of the week, Finance Minister Wolfgang Schaeuble said Tuesday.

Don't do it Germany.  The creditors ain't taking the haircuts, therefor the ECB will print to fill their own write-downs.  With oil heading towards 90, the EUR controlled by crazy machines.  Inflation ad infinitum. 

2013 = Europe will riot overtime

Everybodys All American's picture

So this is what Obama did not want Europe to come out with before the election?

NoDebt's picture

"Greece has also significantly strengthened the segregated account for debt servicing."

There he is!  There's Corzine!  I just KNEW he was going to pop up sooner or later.  He's overseeing the new Greek debt servicing "separate account."  Thank God.  For a minute there I thought maybe Greece was going to try to pull a fast one.

Johnny C.  Representin'!!