ESM Credit Line Now Open, Greece Could Save up to €800m

ESM head Klaus Regling and Europe’s Economy Commissioner Paolo Gentiloni. Photo Source: ESM

Greece now has the option to tap into EU emergency funds released for member states to deal with coronavirus (Covid-19) impact, European Stability Mechanism (ESM) head Klaus Regling told the media on Friday.

Should Greece choose to use the ESM’s credit line, it could save up to 800 million euros in interest rates over the next decade.

“The only condition – I repeat, the only condition – for using this credit line is that the money has to be used for direct and indirect healthcare costs,” said Europe’s Economy Commissioner Paolo Gentiloni.

“Today’s Eurogroup reaffirmed the will of member states to immediately implement the recent funding decisions for European economies to address the effects of the health crisis,” said Greek Finance Minister Christos Staikouras on Friday.

The European Parliament approved the “Pandemic Crisis Support” decision by an overwhelming majority.

Photo Source: ESM

The loans have a maximum average maturity of 10 years and applications can be submitted as of June 1 until the end of 2022. Initial availability for each credit facility has been set at 12 months, with the option to extend it twice for six months.

Staikouras reiterated “the need for this financial instrument to be bold in size, forward-looking, long-lasting, flexible, to extend grants and to concern – mainly – sectors and countries that are most affected by the [Covid-19] crisis”.

The Greek minister went on to add that the government plans to implement all policies immediately so that the effects of the health crisis on society and on the real economy are minimized and so that “we can return to sustainable economic growth soon”.

Gentiloni added that the SURE mechanism would be “become law when formally adopted by written procedure on Tuesday [May 19]”.

Staikouras said Greece would tap into this “important safety net” to protect short-term employment and employee income. SURE unlocks 100 billion euros to help workers keep their jobs.