EU plays down new Greece rescue deal
By Ingrid Melander and Jan Strupczewski |
May 12, 2011, Thursday
|
Print Edition
Print Edition
EUROPEAN Union finance ministers will discuss Greece's debt crisis next week but will not decide on new emergency aid until a mission to strike-hit Athens that began yesterday gives its verdict on progress on reforms.
While Greek newspapers reported that a deal was in the works for extra EU and International Monetary Fund loans in exchange for deeper privatizations, eurozone officials have played down expectations of imminent news on a new rescue deal.
Eurozone finance ministers meeting on Monday are likely to tell Greece it must deliver on savings and privatization targets already agreed if it wants new emergency financing next year, a eurozone source said.
German Deputy Finance Minister Joerg Asmussen said no decision could be made before the inspection by senior EU and IMF officials reports on Greece's progress on the conditions for its current 110 billion euro (US$157.72 billion) bailout. "There will be debate on Greece next week. No decision will be taken," Asmussen said.
The mission will focus on a 2011-2015 fiscal plan and on Greek progress on raising 50 billion euros from privatizations.
A year after a bailout saved debt-choked Greece from bankruptcy it already looks clear it will need more help and may have to impose losses on private bondholders.
Markets are braced for some form of restructuring in the long-run as Greece labors with a 327 billion euros debt mountain.
The country faced large-scale strikes yesterday against the government's cuts in pay and pensions and tax hikes as part of its drive to meet its austerity targets.
"People feel they can't make ends meet and at the same time believe that these policies are not effective. This is an explosive mix," said Costas Panagopoulos at ALCO pollsters.
Germany, which as Europe's largest economy sees itself as the paymaster of loans for Greece, Ireland and now Portugal, has made it clear there can be no further aid or easing of the terms of credit without fiscal commitments in return.
Chancellor Angela Merkel has acknowledged that this stance does not always make her popular.
While Greek newspapers reported that a deal was in the works for extra EU and International Monetary Fund loans in exchange for deeper privatizations, eurozone officials have played down expectations of imminent news on a new rescue deal.
Eurozone finance ministers meeting on Monday are likely to tell Greece it must deliver on savings and privatization targets already agreed if it wants new emergency financing next year, a eurozone source said.
German Deputy Finance Minister Joerg Asmussen said no decision could be made before the inspection by senior EU and IMF officials reports on Greece's progress on the conditions for its current 110 billion euro (US$157.72 billion) bailout. "There will be debate on Greece next week. No decision will be taken," Asmussen said.
The mission will focus on a 2011-2015 fiscal plan and on Greek progress on raising 50 billion euros from privatizations.
A year after a bailout saved debt-choked Greece from bankruptcy it already looks clear it will need more help and may have to impose losses on private bondholders.
Markets are braced for some form of restructuring in the long-run as Greece labors with a 327 billion euros debt mountain.
The country faced large-scale strikes yesterday against the government's cuts in pay and pensions and tax hikes as part of its drive to meet its austerity targets.
"People feel they can't make ends meet and at the same time believe that these policies are not effective. This is an explosive mix," said Costas Panagopoulos at ALCO pollsters.
Germany, which as Europe's largest economy sees itself as the paymaster of loans for Greece, Ireland and now Portugal, has made it clear there can be no further aid or easing of the terms of credit without fiscal commitments in return.
Chancellor Angela Merkel has acknowledged that this stance does not always make her popular.
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