Greece Requests Six Month Loan Agreement Extension, Denies It Requests “Memorandum” Extension

As had been leaked in advance, earlier today Jeroen Dijsselbloem first reported… 

Received Greek request for six months extension.

— Jeroen Dijsselbloem (@J_Dijsselbloem) February 19, 2015

… that Greece had submitted a request to euro-area creditors to extend the availability of bailout funds for six months, i.e., an extension to the “Master Financial Assistance Facility Agreement” not an extension to the Greek “bailout programme” aka the Memorandum per se…

#Greece: Bailout extension to be monitored by #Troika – sources to Reuters. Greek officials deny they’ve requested Memorandum extension.

— José Miguel Sardo (@jmsardo) February 19, 2015

… which has been the sticking point in all Greek government public addresses in recent days. Greece further asked for best use of flexibility in “current arrangement”, which supposedly means an unconditional extension with Greece given the liberty to determine what happens in the next 6 months without Troika intervention. But was it a bailout extension or just a loan extension?

It appears not even Greece is certain after Market News reported that:

  • GREECE DENIES HAS REQUESTED EXTENSION OF ‘BAILOUT’-OFFICIAL: MNI
  • And furthermore:

    Greece hasn’t accepted Troika terms: “will stabilise Greece’s fiscal position, attain appropriate primary fiscal surpluses”.. fight goes on

    — A Evans-Pritchard (@AmbroseEP) February 19, 2015 

    So what exactly does Greece want, ask or request? As Bloomberg reports, Greek authorities state intention to cooperate with partners in order to avert technical impediments in context of Master Facility Agreement recognized as binding vis-a-vis financial and procedural content, according to draft letter requesting extension obtained by Bloomberg News.

  • Greek govt applying for extension of Master Financial Assistance Facility Agreement for 6-month period
  • During extension, authorities will make best use of given flexibility in current arrangement, toward its successful conclusion and review on the basis of the proposals of Greek govt and institutions.
  • Purpose of 6-month extension to Greek loan facility is to agree on mutually acceptable terms for the stabilization of Greece’s financial position, attainment of fiscal targets, according to draft extension request letter obtained by Bloomberg News.
  • Any new measures will be fully funded, Greek authorities will refrain from unilateral action which would undermine fiscal targets
  • Extension will allow reintroduction of collateral waiver for Greek banks, extension of availability of EFSF bonds held by the HFSF
  • Extension will allow for work to begin on new contract arrangement between Greece, Europe and IMF to follow on existing agreement
  • Extension will allow agreement on supervision under EU, ECB framework and IMF during extended agreement
  • Extension to allow discussion on means to implement Nov. 2012 commitment on debt relief
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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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