Factbox: ECB and euro zone c.banks role in Greek debt deal

Reuters
February 22, 2012

Below is a list of the various contributions the European Central Bank and the national euro zone central banks will make to the deal to cut Greek debt, reached in the early hours of Tuesday.

FORGOING BOND BUY PROFITS

The ECB will hand over the 12 to 15 billion euros it is set to make from the 50 billion euros ($66 billion) worth of Greek bonds it bought under a controversial emergency purchase program it set up in May 2010.

In the three years the Greek bailout package runs for, the amount will add up to roughly 5 billion euros. Of that, countries whose own borrowing costs are above the level of the Greek bailout loans (3-month Euribor plus 150 basis points) can use their cut of the ECB bond profits to ensure they don't make a loss on the rescue loans they give to Greece.

The ECB will use its normal practice of passing its annual profits to the 17 euro member central banks as a way of handing the money back. The money will come in yearly installments rather than one lump sum. The central banks will then pass it to governments who can in turn pass it to Athens.

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