You will find in the agreement that some of the issues have been brought forward, meaning that the Greek Parliament will need to legislate very quickly on a number of issues, and so work to recover trust in the whole process and between the member states. There are also very concrete agreements on where the Greek proposals have to be strengthened further: on product markets, labour markets and other reforms. Of course we also needed to address the issue of financing needs and debt, and part of the agreement is that a fund will be established. Assets will be transferred to this fund, and the fund will monetise these assets, either through privatisation or by investing those assets. That money will be used to help reduce debt. It will also be used for the repayment or recapitalisation of banks. One of the big issues that we will have to deal with, once the programme is agreed, is the problem of the banks. The fund will also contribute to the repayment of those capitalisation needs. In addition, once the 25 billion euros needed for recapitalisation is repaid, 50% of the remainder will be used for debt reduction, and 50% for investment in Greece.
This is one of the key elements which will address debt sustainability and encourage a return to growth. We will be following up on these issues in the Eurogroup, beginning already this afternoon. At the same time,, there will be action required from the Greek side in the next couple of days. On Wednesday they will submit the overall agreement for approval by the Greek Parliament, but also the first set of legislative acts required under the agreement. Once that is completed, we will have a Eurogroup call, probably on Wednesday, and that will be the trigger for other national parliaments to start their procedures. That could take place later in the week. I cannot be very precise as national parliaments are sovereign and decide on their own timetables, but once that process is complete, there should be a formal decision by the Eurogroup/board of governors of the ESM, as required under article 13.2 of the ESM Treaty, which then allows the institutions to begin formal negotiations. Then, once that is completed, we will deal with financing needs and debt sustainability. This will also be a key part of completing the overall deal, but that is still weeks ahead, and a lot of work needs to be done in the meantime.
So over the next two days the focus of attention will be on the Greek Parliament. As soon as they have completed the legislative process, the other national parliaments will get to work, and hopefully by the end of the week we can take a decision on mandating the institutions to draw up an agreement.
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