The Greek rescue package means that the EFSF will be looking to financial markets more frequently as well as issuing bonds directly on a “non-cash” basis, Regling said. Last week, the fund issued 66 billion euros in bonds and bills without tapping the markets, comprised of 35 billion euros in European Central Bank collateral enhancements and 31 billion euros in accrued interest and debt swap sweeteners.
Going forward, the fund expects to disburse 48 billion euros on a non-cash basis for Greece’s bank recapitalization efforts. Venizelos said he expects his nation to receive a 25 billion-euro first tranche of bank-sector funds soon.
The rest of the funds headed for Greece will be raised from financial markets, Regling said. The fund also will continue to support ongoing rescue programs in Portugal and Ireland.
“We will from now on go frequently to the market. And next week alone we may go three times to issue short-term bills, to issue five-year bonds and possibly also issue 25- or 30-year bonds,” Regling said. “Given these amounts, the EFSF will be in the market from now on a very regular basis.”
--With assistance from Jurjen van de Pol, David Tweed, Chiara Vasarri, Angeline Benoit, Zoe Schneeweiss, Jurjen van de Pol, Gregory Viscusi, James G. Neuger and Josiane Kremer in Brussels. Editors: Patrick G. Henry, Fergal O’Brien