The European Commission today approved the establishment of a stabilization fund Hellenic Financial Stability Fund (HFSF) for Greek banks' volume of 10 billion dollars are reported to the fund will be earmarked for recapitalizing the Greek banks hit by the debt crisis in the country. According to EC, this mechanism is fully consistent with the rules of providing financial assistance of the European Union, according to a common material today European organization.
Creating HFSF is part of emergency assistance provided to Athens EU in cooperation with the International Monetary Fund (IMF). This fund will operate until 30 June 2017. As stated in the document, in the case of recourse to HFSF every financial company is obliged to provide the European Commission's own restructuring plan.
Compliance with conditions of use of the fund with European standards was confirmed by the European Commissioner for Competition Joaquin Almunia. "The conditions on which Greece could use fund that comply with the support of the financial sector during the crisis, adopted by Greece, as well as other members of the EU", - said Mr. Almunia.
In May of this year Greece reached an agreement with the EU and the IMF to give her financial assistance to 110 billion euros in the three-year loan at preferential rates - well below market. It is literally pulled out of Greece, the debt precipice. The first credit tranche under the program of international financial assistance was obtained Greece in May in the amount of 20 billion euros. Instead, Athens must conduct a radical program to reduce the budget deficit, which up to 2009. reached exorbitant 13,6% of GDP. The Greek "austerity measures" include raising taxes and excise taxes, freezing salaries for state employees, cutting the "thirteenth" salary, etc. These measures have caused fierce resistance from the population. However, according to figures from the Greek government, the program "austerity" is bearing fruit: in the I half of 2010. the government budget deficit has been reduced by 45% year on year.
