The European Financial Stability Facility(EFSF) has confirmed late Tuesday that the Greek financial assistance program expires at midnight of June 30.
"As a result, the last EFSF loan tranche of 1.8 billion euros (2.0 billion U.S. dollars) will no longer be available for Greece and the 10.9 billion euros (12.0 billion dollars) in EFSF notes to cover the potential cost of bank recapitalisation or bank resolution in Greece will be cancelled," the EFSF said in a statement released from Luxembourg.
The EFSF, financed by members of the eurozone member states, is Greece's largest creditor by far. The outstanding loan to Greece stands at 130.9 billion euros (144.0 billion dollars).
The EFSF program was originally due to expire on Dec. 31, 2014, but was extended twice upon request of the Greek government.
"It is regrettable for Greece that the EFSF program will expire today without any follow-up arrangement and that the positive results of the program are put at risk," EFSF CEO Klaus Regling said.
According to the EFSF annual report, Greece was on the path to strong growth until the second half of 2014.
"Greece managed to cut its budget deficit and regain competitiveness. The country was able to access financial markets again and saw its high unemployment start declining," Regling said.
According to the Organization for Economic Cooperation and Development (OECD) and the World Bank, Greece was a reform champion in the Euro area until 2014, with encouraging growth prospects.
"This trend can continue if the Greek population decides to return to the path of reform within the euro area," Regling said.
As the biggest EFSF program ever, Greece's financial assistance program had the most favorable lending conditions ever granted to a member state, according to the EFSF chief.
The average loan maturity of Greece is over 30 years. The country pays neither interest rates nor redemption on its EFSF loans until 2023. These favorable lending conditions provided Greece with budgetary savings of over 16 billion euros for 2013 and 2014 combined, which corresponded to more than 4 percent of Greek gross domestic product in each of the two years.
