Bloomberg News

Euro-Area Decision on Greek Aid Likely in 10 Days, Official Says

October 13, 2011

Oct. 13 (Bloomberg) -- The euro area will probably decide within 10 days on the next aid payment for Greece and plans to avoid a “credit event” in seeking a higher contribution from bondholders in a new Greek rescue, a European Union official said.

The next disbursement would be the sixth under the 110 billion-euro rescue approved last year for Greece by the euro area and the International Monetary Fund. The next installment includes 5.8 billion euros from the euro area and 2.2 billion euros from the IMF.

Market developments since a second package for Greece was approved by euro-leaders on July 21 mean it will be more expensive for creditors, the EU official told reporters today in Brussels on the basis of anonymity. That 159 billion-euro package foresaw 50 billion euros from bondholders through debt swaps and exchanges, which would entail a 21 percent writedown.

In seeking a higher contribution from bondholders, the euro area will seek to avoid triggering a credit event because of the uncertainty that could result, according to the official.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: Jones Hayden at jhayden1@bloomberg.net


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