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New Aid Proposal For Greece Almost Prepared

The new draft proposal by EWG, Eurogroup’s commission, provides an additional loan of €30-35b, revenues of €25b through privatizations and participation of private investors in rolling over of €20b debt maturing in 2012-2014, according to German diplomats. 

The EWG agreed generally that a potential Greek default is a systemic risk to the Eurozone and the euro and therefore they shouldn’t allow it to happen. 

On this basis, it was agreed to propose this package to European Ministers of Finance in order to enable its political management in countries such as Germany, the Netherlands and Finland, which face internal opposition to pass an additional Greek aid program. Of course it should be approve first at the European Summit on June 23.  

This proposal still has several technical aspects pending in both the second and third part, particularly on how to secure €25b through privatizations (who and how would administrate the Privatization Agency) and the participation of institutional investors. 

The concern expressed during the EWG meeting does not refer only to Greece, but also to the other troubled economies which are expected to face a new round of pressures, as happened in Greece a year after the first bailout loan. Thus, there are concerns and proposals by the administration of ECB and the European Council. 

Diplomatic sources in Brussels told that there are already some proposals prepared far from the spotlight, that could be discussed at the summit in June if they mature politically.

Regarding Greece, the promoting of a new aid program requires the launching of the medium-term program which will more or less be a new Memorandum of Understanding until 2014, while heavy pressure will be exerted to the country for the 2011 measures.
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