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Greece activates €40bn EU IMF loan

Greek prime minister George Papandreou has announced that his country will be activating the €40bn aid package offered by the European Central Bank and the International Monetary Fund.

Greek debt yields reached new highs yesterday after the market panicked that the indebted European nation had not taken the EU and the IMF on their offers of a combined €40bn (£34.6bn) package.

According to Reporter.gr, this morning Papandreou asked his finance minister George Papaconstantinou to activate the package.

This comes after Moody’s downgraded Greek sovereign debt to A3 yesterday after it emerged that its budget deficit was more than 1 per cent more than initially thought.

Papandreou is reported to have said: “Today the situation in the market might degrade the economy. We will not allow this. I have already instructed the Ministry of Finance to provide Greece a sheltered harbour that will allow us to rebuild our boat with new materials.”

The package is made up of a €30bn loan from the EU at 5 per cent and €10 bn from the IMF.

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