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Greece should tap EU-wide rescue fund for emergency loan, says top EU official

brussels bureau

Greece should tap EU-wide rescue fund for emergency loan, says top EU official


An EU-wide fund should be used to provide short time loans to Greece, senior European officials say.

The European Commission is proposing a seven billion euro loan to Athens so it can cover its immediate financing needs.

“Given the political, legal, financial and time constraints there were two most realistic options left. Bilateral loans and the programme for the European Financial Stabilisation Mechanism (EFSM),” said Valdis Dombrovskis, the EU commissioner in charge of the euro.

“However, there are no prospects for any bilateral help given the obvious absence of any other solution the best possible avenue left is the EFSM programme.”

That programme uses guarantees rather than transfers of hard cash.Britain has signed up to it, but it wants to play no part in bailing Greece out.

“Frankly it’s in our interest for the eurozone to resolve these issues. We are not involved in the debate directly because we are not in the euro but we do need them and I’m not going to join the euro but they need to resolve these issues and they need to resolve them quite fast,” British Prime Minister David Cameron told parliament on Wednesday.

At the same time, the EU Commission wants to tap existing EU funds of around 35 billion euros for growth by 2020.

The money had already been set aside for Greece under EU budget rules.

But there’s one condition: Athens will need to make good on the promises that it signed up to at Sunday’s eurozone summit.

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