# EUR-Lex - 52013SC0348 - EN

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# 52013SC0348

**COMMUNICATION TO THE COMMISSION Main terms of the EFSF Amendment Agreement with Portugal on the extension of maturities /* SEC/2013/0348 final */**

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COMMUNICATION TO THE COMMISSION

Main terms of the EFSF Amendment Agreement
with Portugal on the extension of maturities

The euro area Member States agreed in May
2010 to create a European Financial Stability Facility (EFSF) in order to
financially support euro area Member States in difficulties caused by
exceptional circumstances beyond their control. The EFSF was incorporated on 7
June 2010 for the purpose of providing stability support to euro area Member
States.

By a decision of the representatives of the
governments of the euro area Member States of 7 June 2010 the Commission
was tasked with duties and functions, including, inter alia, providing
proposals to the euro area Member States on the loan facility agreement to be
signed with the beneficiary Member State(s).

The EFSF Framework Agreement was signed in
June 2010 and amended in September 2011. It refers to certain tasks of the
Commission pursuant to the decision of the representatives of the governments
of the euro area Member States of 7 June 2010.

On 17 May 2011, the Eurogroup and the
ECOFIN Ministers unanimously decided to grant financial assistance in response
to the Portuguese authorities' request submitted on 7 April 2011. A Loan
Facility Agreement (LFA) was signed between the EFSF and Portugal on 27 May 2011
in line with the Proposal by the Commission adopted on 10 May 2011 (SEC(2011) 576).

A Financial Assistance Facility Agreement (First
FFA) was concluded with Portugal on 9 December 2011, in line with the Proposal by
the Commission adopted on 5 December 2011 (SEC(2011) 1549). On 25 May 2012 a
Master Financial Assistance Facility Agreement (Master FFA) was signed covering
the remaining disbursements to Portugal in the amount of up to EUR 16.5
billion. The main terms for the Master FFA were provided in the Proposal by the
Commission adopted on 21 May 2012 (SEC(2012) 326).

In order to support Portugal’s efforts to
regain full market access and successfully exit its programme, the Eurogroup
decided on 12 April 2013 to lengthen the maturities of the EFSF loans by
increasing the weighted average maturity limit by seven years. As a result, the
terms of the above mentioned EFSF facilities need to be modified.

In accordance with the EFSF Framework
Agreement, the Commission, in liaison with the ECB, shall make a proposal to
the Eurogroup Working Group of the main terms of the loan facilities to be
proposed to Portugal, based on its assessment of market conditions and provided
that the terms of such assistance contain financial terms compatible with the
relevant Memorandum of Understanding and the compatibility of maturities with
debt sustainability.

The following main terms of the loan facilities
to Portugal are proposed:

(1) 
The average maturity of the financial assistance
made available under the loan facilities provided by the EFSF shall be increased
up to 22 years, provided that the weighted average maturity of the financial
assistance made available under the facilities provided by the EFSF shall not
be extended by a period in excess of 7 years.

(2) 
The financial terms as set out in the Master
FFA, including the interest rate and the components of the EFSF cost of
funding, shall apply starting from the initial final repayment date and until
the revised final repayment date.

In line with the tasks assigned to it by
the euro area Member States referred to above, the Commission is invited to
agree that the proposal is submitted to the Eurogroup Working Group.