The Greek finance ministry on Monday said claims that the government was offering state property as collateral to guarantee the repayment of loans to the European Stability Mechanism (ESM) was “unfounded and misleading”.
In an announcement, the ministry said that a draft omnibus bill currently being fast-tracked through Parliament did not envisage the setting up of guarantees or any mortgage on state assets to secure loans received by ESM. Instead, the bill envisages the creation of an ESM protection mechanism linked to dividends (if any) collected by the Greek state – a form of guarantee also offered in 2012. More specifically, 50 pct of dividends paid to the Greek state will be used for the repayment of loans, while 25 pct will be used for investments and the remaining 25 pct will be used by the Greek State Property Fund. This guarantee creates a protection mechanism for EMS and is not unlimited, but covers a sum of 25 billion euros, which approaches the theoretical value of the dividends likely to be collected by the Greek state in the future.
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