Eurozone finance ministers on Thursday authorized the European Financial Stability Facility (EFSF) to implement the Eurosystem collateral enhancement facility, a move which is likely to restore the eligibility of Greek bonds as collateral.

In a statement released after a meeting of eurozone finance ministers here, Eurogroup President Jean-Claude Juncker said the finance ministers gave the authorization in view of the decisive and swift legislative actions taken by Greece and the completion of relevant national procedures in member states.

"This entails the provision by EFSF of a buy-back scheme for the eligibility of marketable instruments issued or guaranteed by the Greek government for use as collateral in Eurosystem monetary policy operations," Juncker said.

One day after the rating agency Standard & Poor's downgraded Greece's long-term ratings to "selective default," the European Central Ban (ECB) on Tuesday suspended the eligibility of marketable debt instruments issued or fully guaranteed by Greece for use as collateral in Eurosystem monetary policy operations.

At the same time, the ECB also said that marketable debt instruments issued or fully guaranteed by Greece will become in principle eligible upon activation of the collateral enhancement scheme, together with a number of other measures aimed at assisting Greece in its adjustment program.

In a second auction for its three-year Longer Term Refinancing Operation (LTRO) on Wednesday, the ECB lent over half a trillion euros (666 billion U.S. dollars) to a total of 800 banks.