Eurostat has given a positive opinion to Greece on whether or not to register its debt guarantees Greek Stategiven in the context securitization of red loans in “Hercules”.

In a letter she sent to the Eurozone and Greek statistical authorities, she announced her decision not to retroactively apply guarantees provided in the context of her earlier debt securitization. The rules he set on Feb. 1, under which guarantees would be credited against debt if individual and government risk taking were not balanced, would only apply to future securitizations.

The decision unloaded the government, as it brought out of the 18 billion euros of guarantees that had already been given in the context of Hercules and there was a risk of being indebted at a time when Greece was fighting to reduce it. The 3 current securitizations that will be subject to the stricter Eurostat rules deal with a much lower percentage of guarantees, around 1.2 billion euros, and measures are being taken to cover the new risk-sharing rules, according to a competent Greek official.

The risk of an increase in public debt by 18 billion euros was avoided.

The case was raised by Eurostat in March 2021, and although the Greek authorities held consistent consultations with the European Commission regarding the status of “Hercules”, they never raised this issue on their part. The European Statistical Office then advocated issuing all guarantees on credit, and despite the fact that Hercules was created according to the norms of the corresponding Italian system, which provided guarantees from the Italian state in the amount of 110 billion euros, without disclosing the topic. In the subsequent preliminary round among Member States, only 9 out of 27 countries sided with Greece against debt registration, while the rest were opposed or neutral. On the contrary, both the European Commission and the European Central Bank positioned themselves in favor of Greece, which, of course, played a role in the development of events.

Eurostat took the first step back on 1 February by increasing from 3 to 4 the number of criteria on which to decide whether public and private risk-taking is equal, and determined that it is enough for only one of them to be satisfied.

However, in reality, the previous securitizations of Hercules most likely will not “pass” even according to these more relaxed criteria, and the guarantees will be written into debt. In the end, it was decided to apply the criteria only to future securitizations, which would be reviewed each time by Eurostat before they were completed.