EU bank allows Greek firms to pay loans in different currency, denies preparing for euro exit

Page last updated at 05:38 GMT, Monday, April 23, 2012 - 10:38 EST

CanadianBusiness.com:

A man walks past a branch of the National Bank of Greece in Athens, on Sept. 23, 2011.

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The taxpayer-funded European Investment Bank has started including a new legal clause in its contracts with Greek companies that allows them to repay euro loans in a different currency.

The change in policy comes amid concerns that the struggling country may not be able to remain in the euro. The policy was introduced at the beginning of the year but implemented for the first time in a 70 million ($92 million) loan to Greece's Public Power Corporation agreed earlier this month.

Greece has been granted 240 billion in rescue loans from the other euro countries and the International Monetary Fund to help it fight off a two-year-old debt crisis. Many economists argue that despite the help, Greece's economy is too weak to repay its massive debts and that it will eventually have to return to its old currency, the drachma.

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