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Greece has formally requested the first €20 billion from the IMF and the EU

11 May 2010 / 14:05:35  GRReporter
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The Greek government has formally requested the International Monetary Fund and the European Central Bank to make a wire transfer of the first tranche of €20 billion. €14.4 billion will come from the eurozone countries and the remaining €5.5 billion - from the IMF. The Fund will transfer the first three billion Euros tomorrow, Wednesday, May 12, with 1.3 percent interest, and then the remaining €2.5 billion will be with interest of 3.30 percent. The interest on the money from the eurozone countries is 3.6 per cent interest. So for five years the total interest to be paid by the Greek State for the first €20 billion is €3.2 billion. 

According to the agreement with IMF and EU within 2010 Greece will receive from the two organizations a total €40 billion under the condition that the country will follow a rigorous program and report the progress of this program. €30 billion will come from the eurozone countries and €10 billion - from the Fund. For the three years, for which economic aid package for Greece applies, the country will receive a total of €110 billion for strengthening the public finances and bringing them into line with the Maastricht criteria for eurozone membership. 

"We will deal with management of the Greek deficit and external debt in the long term," said from Washington the IMF Executive Director Dominique Strauss-Kahn. According to a IMF report the deep recession of Greek economy will lead to an increase in external debt as a percentage of GDP and in 2013 it will be 149 per cent. In the coming years it will start to fall and in 2020 it will again reach 120 per cent of GDP - as much as it is at the moment. News about the budget deficit is more positive, because with the help of IMF experts in 2013 it will fall to 4.6 per cent. 

The economy will shrink by around 4 per cent between 2010 and 2011 and after 2015 we will have positive economic growth of around 2.75 per cent. IMF experts say that is there is poor development of the Greek economy, the country's external debt could be up to 166 percent of GDP in 2020 and vice versa, in an optimistic development it could be 80 per cent of GDP in that year.  IMF estimates that Greece will need at least one or two years to restore its reputation on international markets. 

Today sobering reigns of Athens Stock Exchange after yesterday's rise in the index of nearly 10 per cent. Trading began with a minimal decrease of 0.5 per cent. Mild decreases of 1-2 percent noted the indices in London, Frankfurt, Paris, Madrid and Milan. 

Tags: Greece economy crisis measures reforms
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