Japan’s EXIM Bank Guarantees Syndicated Loan for Greece
TOKYO (AP) _ Japan’s government-owned Export-Import Bank on Wednesday guaranteed a $77 million loan for Greece’s state-owned railway.
The 12-year loan will be provided by Japanese life insurance companies.
The bank said it will repay the loan if the Greek railway company were unable to do so.
Yasushi Negishi, a spokesman for the bank, said the guarantee was the first of its kind under the $50 billion ″Funds for Development″ initiative launched by the Japanese government in June.
The program includes $40 billion in loans and guarantees for private loans, and $10 billion in trade insurance from the Ministry of International Trade and Industry.
Japan initiated the program a month ahead of the July Tokyo summit meeting of the Group of Seven industrialized nations, many of which were irritated by Japan’s huge current account surplus, which reached a record $126 billion in the fiscal year ended March 31.
In addition, Japan has promised to spend up to $75 billion in governmental foreign aid over the next five years. The program started in January.
Negishi said the EXIM Bank’s guarantee helps encourage independent overseas loans by private financiers in Japan, lower interest rates and longer terms for the loans.
″The EXIM Bank chose this loan as the first case to apply its new guarantee facility in recognition that the improvement of the railway system will greatly contribute to the economic development of Greece, and that this loan to a member of the European Community will help improve Japan-EC economic relations, which are clouded by the trade imbalance,″ the announcement said.