EU in rescue talks on Greece
By Nicholas Paphitis |
March 2, 2010, Tuesday
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Print Edition
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THE Europe Union and Greece negotiated yesterday over making more painful budget cuts amid reports that fellow European nations, like France and Germany, are preparing a rescue package for the indebted country.
Europe's financial affairs chief Olli Rehn was in Athens to meet Finance Minister George Papaconstantinou, Prime Minister George Papandreou and other senior officials, to address the austerity program which the EU has warned must be expanded.
The talks came amid reports that officials in fellow European countries are preparing a bailout for Greece, to be finalized this week.
The Wall Street Journal reported that state-owned banks and bond investors in France and Germany would be willing to buy as much as 30 billion euros (US$41 billion) in Greek bonds to calm market fears of a default. It cited anonymous sources familiar with the situation.
This could help the country meet its short-term debt needs, as some 20 billion euros worth of government bonds mature by the end of May. Greece plans to borrow some 54 billion euros through sovereign debt issues this year, and has so far raised around 13 billion euros.
In a television interview on Sunday, French Finance Minister Christine Lagarde said she was confident Greece would manage to successfully refinance "via the means that we are now studying ... involving private partners, public partners, or both."
She did not provide further details.
"Greece will not be left in the lurch ... on condition of course that it respects the engagements it took vis-a-vis its European partners in its stabilization plan," she said.
Although German Chancellor Angela Merkel did not explicitly rule out the reported rescue measures, she denied any taxpayer money would be spent on Greece. "We have a contract which rules out the possibility of bailing out other nations," Merkel told German broadcaster ARD.
Papandreou is due to see Merkel on Friday, and will fly to Washington on March 9 for talks with United States President Barack Obama.
Yesterday, he pledged again to pull Greece through its worst postwar economic slump and appealed for ordinary Greeks to back the effort.
"It is extremely urgent for us to address the dramatic fiscal problem, because it is threatening to strip us of any ability to determine our own fate," Papandreou told the Cabinet.
"And we will do so. We will not allow Greece to slide further, or finally sink. We are asking Greeks today to join in the common effort to save our country and the overwhelming majority is prepared to do so," he said.
Europe's financial affairs chief Olli Rehn was in Athens to meet Finance Minister George Papaconstantinou, Prime Minister George Papandreou and other senior officials, to address the austerity program which the EU has warned must be expanded.
The talks came amid reports that officials in fellow European countries are preparing a bailout for Greece, to be finalized this week.
The Wall Street Journal reported that state-owned banks and bond investors in France and Germany would be willing to buy as much as 30 billion euros (US$41 billion) in Greek bonds to calm market fears of a default. It cited anonymous sources familiar with the situation.
This could help the country meet its short-term debt needs, as some 20 billion euros worth of government bonds mature by the end of May. Greece plans to borrow some 54 billion euros through sovereign debt issues this year, and has so far raised around 13 billion euros.
In a television interview on Sunday, French Finance Minister Christine Lagarde said she was confident Greece would manage to successfully refinance "via the means that we are now studying ... involving private partners, public partners, or both."
She did not provide further details.
"Greece will not be left in the lurch ... on condition of course that it respects the engagements it took vis-a-vis its European partners in its stabilization plan," she said.
Although German Chancellor Angela Merkel did not explicitly rule out the reported rescue measures, she denied any taxpayer money would be spent on Greece. "We have a contract which rules out the possibility of bailing out other nations," Merkel told German broadcaster ARD.
Papandreou is due to see Merkel on Friday, and will fly to Washington on March 9 for talks with United States President Barack Obama.
Yesterday, he pledged again to pull Greece through its worst postwar economic slump and appealed for ordinary Greeks to back the effort.
"It is extremely urgent for us to address the dramatic fiscal problem, because it is threatening to strip us of any ability to determine our own fate," Papandreou told the Cabinet.
"And we will do so. We will not allow Greece to slide further, or finally sink. We are asking Greeks today to join in the common effort to save our country and the overwhelming majority is prepared to do so," he said.
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