Aid to Greece in five questions

• What is the plan?

The total amount loaned to Greece for three years, is 110 billion euros. The International Monetary Fund will lend 30 billion, 80 billion European states. For the first year alone, the total amounts to 45 billion euros.

Countries in the euro area will lend at a rate of about 5%, well above that at which they borrow their own markets. They must therefore, ultimately, make money with this operation. Assuming that Greece will repay many loans.

• Is it enough?

It is still uncertain. "The loan size is substantial and should fill most of the financial needs of Greece," say economists at BNP Paribas, which predict a total requirement of about 120 billion euros.Rumors from the German Ministry of Budget, Greece would need more than 150 billion euros.

Still, the plan means, Athens will not return to tap capital markets before the first quarter of 2012, according to the Greek Finance Minister George Papaconstantinou.

But everything depends on the success-or failure of the austerity plan set up by Athens. If public spending is poorly controlled, then the budget deficit will fly, Greece will take over, the debt will increase. The deficit will worsen if the recovery is also softer than expected. So the rescue plan would prove insufficient.

• When will funds be disbursed?

It was one of the obsessions of the markets before the official announcement of the plan. Greece was indeed an urgent need for funds: it must find eight billion euros by May 19It should eventually find them without worries thanks to the quick release of the aid by major contributors that are notably France and Germany.

Many states have approved the plan this week (or are about to do), such as Belgium, Portugal, the Netherlands, Italy, Cyprus, Luxembourg and Austria. France has voted the text on the night of Thursday to Friday. The outcome of the vote is no doubt right and left supporting the rescue plan. In Germany, after much wrangling, the plan should also be voted on Friday.

Italy, part of major contributors, will decide the payment by decree and may publish it immediately if needed. Same in Spain.• • •

• • • Other States show less eagerness, such as Slovakia, who refuses, or Ireland, Finland and Slovenia.

• Is it risky to lend to states in Greece?

to believe the rating agency Standard & Poor's, the most severe, Greece 23.08% of risk of default within three years. This is reflected in its 'BB +' rating assigned to it by the agency.

But "if European countries lend to Athens is that they do not believe the risk of default," said Jesus Castillo, an economist at Natixis. The European Central Bank, as the International Monetary Fund believes that a default is "beyond question".

However, "if repayment problems appeared after three years, the loans could be extended," said during the debates in the National Assembly Chairman of the Finance Committee Jerome Cahuzac.to believe the MP, who auditioned Budget Minister Francois Baroin, the latter "has not ruled out a rescheduling of Greece against the eurozone countries since it was envisaged that such debt is not repaid at maturity of three years, but later ".

• How a State debt can borrow to lend to another debt?

Spain and Portugal, being attacked by the markets and in financial difficulty, will lend to Greece respectively 9.79 billion and 2.06 billion euros.

Not to worry, according to Jesus Castillo, "they always have access to the market to finance", in contrast to Greece. Spain has also successfully raised 2.345 billion euros on Thursday at an average rate of 3.532%. Although lower than that at which it will lend to Greece.The Greek operation should be profitable for both countries of the Iberian Peninsula.

On the other hand, the loan granted to Greece will not fill the deficit under Maastricht. For France, the loan will weigh initially 3 billion euros over the budget deficit, it will not affect the deficit calculated by Brussels, by Representative Charles de Courson related remarks Bercy.

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