Saturday 20 January 2018

Ireland's exposure to Greek debt is €2.6bn, says think-tank

People stand in a queue to enter a bank for limited services, as the front page of newspaper depicting the Greek Prime Minister Alexis Tsipras reading ''Time runs out for a solution before catastrophe'', in Athens. Photo: AP
People stand in a queue to enter a bank for limited services, as the front page of newspaper depicting the Greek Prime Minister Alexis Tsipras reading ''Time runs out for a solution before catastrophe'', in Athens. Photo: AP
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Colm Kelpie

Colm Kelpie

Some form of debt relief is crucial as far as the Greeks are concerned. It's a thorny issue, and has been one of the many stumbling blocks in the talks process to date.

A number of countries, including Ireland, are opposed to the idea of a debt write-down. But the Irish government has said it is in favour of potential debt re-profiling - essentially extending the maturities on Greek loans.

So, who has the most exposure to Greece, and what are the numbers? Those are not questions that are easily answered. After two bailouts, the data is complex.

The estimated total exposure to Greece from European countries is €325.84bn, according to Open Europe, a London-based think-tank.

That includes €52.9bn in bilateral loans under the first bailout agreed in 2010, known as the Greek Loan Facility. On that occasion, Ireland provided €350m.

Germany, Greece's largest creditor country, provided €15.17bn. France, the second biggest creditor state, coughed up €11.39bn.

In the second bailout programme for the Mediterranean state, agreed in 2012, it is estimated that €130.9bn in loans have been provided via the European Financial Stability Facility (EFSF), the Eurozone's initial financial rescue facility set up in the wake of the crisis. (This has since been replaced by the European Stability Mechanism, or ESM.)

Neither Ireland nor Portugal provided any cash on that occasion, as both countries were already in bailouts of their own.

But although Ireland only lent Greece €350m, its exposure to the crisis-ridden country is much larger, at €2.55bn, according to Open Europe.

Ireland's share of the IMF portion of the Greek debt stands at €150m, and the state also has exposure via the European Central Bank, through the latter's securities markets programme.

Fine Gael MEP Brian Hayes has pointed out that if Greece misses its payment due to the ECB on July 20, Ireland will take a hit.

"On 20th July, Greece has to pay €3.5bn to the ECB in maturing bonds and as a Eurozone member Ireland has indirect exposure to this repayment. If this payment is missed the Eurozone system takes a hit and that includes Ireland because we have guaranteed a portion of the ELA support," Mr Hayes said.

Open Europe estimates that total Greek debt stands at €312.7bn, including about €213bn currently disbursed by the Eurozone and IMF bailouts.

Not all of the money due under the second bailout programme was disbursed before it expired at the end of June.

The Eurozone holds the lion's share of Greece's debt, with 58.8pc, followed by the IMF at 9.2pc.

Irish Independent

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