EU to activate aid package for Greece soon
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The European Commission will soon go through procedures to activate an aid package to Greece after the country formally asked for help on Friday.
The procedure will not take weeks and will be relatively fast, European Commission spokesman Amadeu Altafaj Tardio told reporters at a press briefing.
"It will be rather quick in the sense that we have been monitoring the situation, and the developments in the bonds market in particular," Altafaj said. "If there is an issue we have been working on night and day during the last week, it is the Greek situation."
Altafaj said that there is a commitment on all the members of the eurozone to participate in the mechanism and to ensure that the approval of the funding is rapid.
"We are not foreseeing any obstacle here, we are going to work in such a way that the sequences are taken through quickly and effectively, " he said.
The European Commission and the European Central Bank will issue an opinion as to the need to activate the mechanism subsequent to the request, he added.
Members of the eurogroup will formally decide on the activation of the mechanism after the opinion is issued, he said.
The request as to how much exactly would be borrowed by Greece has not been sent yet and therefore the exact date of the activation and the disbursement are not known so far, Altafaj said.
Greek Premier Minister George Papandreou on Friday asked for activation of the aid program jointly supported by the EU and the International Monetary Fund.
"It is time that Greece will be supported by European partners and the IMF," Papandreou said in a televised address during a visit to the island of Kastelorizo in eastern Greece.
"I have already asked Finance Minister George Papaconstantinou to move onto the necessary actions," he said.
According to figures released Thursday by the EU statistical bureau Eurostat, Greece's public deficit shot up to 13.6 percent of its gross domestic product (GDP) in 2009, much higher than the previously predicted 12.9 percent. Also, the country's public debt was estimated at 115.1 percent of its GDP, which was almost double the ceiling of 60 percent set by EU rules.
Olli Rehn,the European commissioner for Economic and Monetary Affairs, said in a statement that the figures released for Greece called for an effective and full implementation of this year's fiscal consolidation measures pledged by Greece.
"They also underline the urgency to intensify the preparations of structural reforms and additional measures for the coming years," he said.
Greece has put forward an austerity plan at the request of the EU, promising to reduce its public deficit by 4 percentage points by the end of this year.
Analysts said the newly released figures put more pressure on Greece to implement its austerity program and triggered the formal request for aid.
Finance ministers of the eurozone hammered out a detailed aid package for Greece on April 11.
Member states of the eurozone will grant Greece through the European Central Bank up to 30 billion euros (US$40. 15 billion) with an interest rate around 5 percent for three years, while the IMF will release an additional 13 to 15 billion euros (US$17.4 to 20. 08 billion) with a lower interest rate.
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