The Euro members of the EU will lend Euro 7bn to Greece via the EFSM (technically an EU not a Euro area fund) so Greece can repay the ECB and the IMF what it owes them, prior to agreeing new loans from them! We are told the non Euro members of the EU will not carry any of the risk, so why use an EU rather than a Euro area fund?
Meanwhile the ECB which says it wants Euro 4.2 bn back on Monday from a previous loan will lend an extra Euro 900 million to Greek banks in the next few days and will doubtless be expected to lend considerably more thereafter.
Why this absurd money go round? Why don’t the creditors delay repayments for a period whilst they are negotiating the new longer term loans? What’s the point of a bridging loan from them to repay themselves?