EU special summit 2011
The 2011 EU Special Summit took place on July 21, 2011 in Brussels , Belgium . The President of the European Council, Herman Van Rompuy, chaired the meeting . The central topic of the special summit was negotiations on measures to counter the euro crisis , especially the Greek sovereign debt crisis .
Topics and participants
Greece
The special summit had become necessary because the financial framework for the aid pledges agreed at the 2010 EU special summit was inadequate. In the previous year, the euro countries and the International Monetary Fund (IMF) agreed on aid commitments totaling 110 billion euros. Greece was still unable to finance itself on the capital market. Another rescue package was therefore required. It was agreed that Greece should receive 159 billion euros from the EFSF and the IMF. At the same time, interest rates were to be reduced from 4.5 percent to 3.5 percent and the terms doubled to 15 years in order to make it easier for Greece to repay its debts. At the same time, Portugal and Ireland as well as other crisis countries should benefit from the agreed loan terms. It was agreed that Greece should receive 109 billion euros in aid from the euro countries, spread over three years. The heads of state and government also agreed to include banks, insurance companies and other private creditors in the “rescue of Greece” with almost 50 billion euros. 37 billion euros should already be achieved by exchanging existing government bonds for new bonds with an extended term. Private creditors should forego another 12.6 billion euros when selling old Greece bonds at a discount to the EFSF rescue fund.
Bond purchases by the EFSF
In order to prevent further euro countries from getting into a situation like Greece, the summit participants had spoken out in favor of expanding the European rescue fund EFSF. In future, the fund should be able to buy up government bonds on the capital market, on condition that both the European Central Bank and the 17 euro countries agree to the purchases. The EFSF should also be able to provide the euro countries with credit lines as a precaution against speculation.
Reactions
After the special summit, Chancellor Angela Merkel praised the agreed aid to Greece. “Europe has shown itself capable of acting. What we Germans spend on a stable euro, we get back many times over, ”said Merkel. She described averting the euro crisis as a "historic task" and emphasized that "Europe is no longer conceivable without the euro." Greek Prime Minister Giorgos Papandreou said he was relieved about the aid. The package creates "a portable path for Greece". The Prime Minister reiterated that his government was determined to implement reforms to meet the conditions for the aid package. He stressed that the decision sends "a very strong message of support to the banking sector".
The French President Nicolas Sarkozy had stressed after the meeting that this was the beginning of a European Monetary Fund. “There is a straight path from the resolutions of May 2010 to today's resolutions,” said Sarkozy. Chancellor Merkel added that the resolutions meant “for the people in Germany more security for our common currency and thus also a basis for our economy, but also for prosperity as a whole”.
Individual evidence
- ↑ a b c What the Greek saviors agreed on. Euro summit. spiegel.de, July 21, 2011, accessed December 5, 2016 .
- ↑ a b c d Juncker: "This is the last package". New aid to Greece. faz.net, July 22, 2011, accessed December 5, 2016 .
- ↑ "The euro is worth every effort". Summer press conference by Chancellor Angela Merkel. sueddeutsche.de, July 22, 2011, accessed December 5, 2016 .
- ↑ New aid package for Greece. Agreement at EU summit. faz.net, July 22, 2011, accessed December 5, 2016 .