Second Economic Adjustment Programme for Greece

The Second Economic Adjustment Programme for Greece, usually referred to as the second bailout package or the second memorandum, is a memorandum of understanding on financial assistance to the Hellenic Republic in order to cope with the Greek government-debt crisis.

It was signed on 1 March 2012 by the Greek Government under then-prime minister Lucas Papademos on one hand, and on the other hand by the European Commission on behalf of the Eurogroup, the European Central Bank (ECB) and the International Monetary Fund (IMF).

The Second bailout package superseded a prior bailout, the First Economic Adjustment Programme for Greece.

On 21 July 2011, 17 leaders of Euro countries, meeting at an EU summit, approved a preliminary draft of a second bailout package for Greece to address the limitations of the First Greek bailout package. The second bailout package would take the form of an €100bn aid package provided by the newly created European Financial Stability Facility. The repayment period was extended from seven to 15 years and the interest rate was lowered to 3.5%.

For the first time, this also included a Private Sector Involvement (called a PSI), meaning that the private financial sector accepted a "voluntary" haircut (finance). It was agreed that the net contribution of banks and insurance companies to support Greece would include an additional €37bn in 2014. The planned purchase of Greek bonds from private creditors by the euro rescue fund at their face value will burden the private sector with at least another €12.6bn.

It was also announced at the EU summit, a reconstruction plan for Greece in order to promote economic growth. The European Commission established a "Task Force for Greece".

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