Greece battles to stay solvent, in eurozone
Source: Agencies |
July 25, 2012, Wednesday
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Print Edition
Print Edition
GREECE'S international creditors return to Athens to assess how far from bailout terms the country has strayed as Prime Minister Antonis Samaras pieces together additional budget cuts that may determine the country's membership in the euro area.
Samaras will see the "troika" of officials representing the euro area, the European Central Bank and the International Monetary Fund on Friday, the day after their consultations with Finance Minister Yannis Stournaras on budget cuts for 2013 and 2014. German Vice Chancellor Philipp Roesler told broadcaster ARD on Sunday he is "very skeptical" Greece can be rescued and the prospect of its exit from the monetary union "long ago lost its terror."
"Statements by members of the German government at the weekend suggest support for a renegotiation of the Greek program is far from guaranteed," Riccardo Barbieri, chief European economist at Mizuho International Plc in London, wrote in a note yesterday. "There is a feeling that the German government may be pushing for a Greek exit from the euro."
Greece's recession may be deeper than 7 percent this year, Samaras said yesterday, estimating that the country would not return to growth before 2014.
"We will start containing the recession this year and we will be able to move onto recovery at the beginning of 2014," Samaras told a parliamentary group meeting.
In the prime minister's first budget-cutting exercise, he's seeking 11.5 billion euros (US$14 billion) of measures to restore credibility with creditors to receive funds pledged under two rescue packages totaling 240 billion euros. Two elections in six weeks derailed reforms, halted state-asset sales and sparked concerns about whether the country can remain in the 17-nation euro bloc.
Greece faces the risk of running out of money and a possible default as it seeks to qualify for the disbursement of 4.2 billion euros, a payment that was due in June as the first part of a 31 billion euro transfer.
Greece has to reduce its budget deficit to 7.3 percent of GDP this year from 9.1 percent in 2011.
Samaras will see the "troika" of officials representing the euro area, the European Central Bank and the International Monetary Fund on Friday, the day after their consultations with Finance Minister Yannis Stournaras on budget cuts for 2013 and 2014. German Vice Chancellor Philipp Roesler told broadcaster ARD on Sunday he is "very skeptical" Greece can be rescued and the prospect of its exit from the monetary union "long ago lost its terror."
"Statements by members of the German government at the weekend suggest support for a renegotiation of the Greek program is far from guaranteed," Riccardo Barbieri, chief European economist at Mizuho International Plc in London, wrote in a note yesterday. "There is a feeling that the German government may be pushing for a Greek exit from the euro."
Greece's recession may be deeper than 7 percent this year, Samaras said yesterday, estimating that the country would not return to growth before 2014.
"We will start containing the recession this year and we will be able to move onto recovery at the beginning of 2014," Samaras told a parliamentary group meeting.
In the prime minister's first budget-cutting exercise, he's seeking 11.5 billion euros (US$14 billion) of measures to restore credibility with creditors to receive funds pledged under two rescue packages totaling 240 billion euros. Two elections in six weeks derailed reforms, halted state-asset sales and sparked concerns about whether the country can remain in the 17-nation euro bloc.
Greece faces the risk of running out of money and a possible default as it seeks to qualify for the disbursement of 4.2 billion euros, a payment that was due in June as the first part of a 31 billion euro transfer.
Greece has to reduce its budget deficit to 7.3 percent of GDP this year from 9.1 percent in 2011.
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