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Greece sees 'difficult and critical' talks
Source: Agencies |
December 13, 2011, Tuesday
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GREECE'S negotiations with international debt inspectors on a second rescue loan package are "difficult and critical," Finance Minister Evangelos Venizelos said yesterday, after initial talks on the package to keep the debt-crippled country solvent while easing its crushing debt burden.
Greece was granted a first, 110 billion euro (US$147 billion) bailout package by its European partners and the IMF last year. That became necessary after years of government overspending and tricky data reporting provoked repeated credit downgrades, which made it too expensive for the country to borrow from money markets.
The May 2010 deal staved off bankruptcy, and in return Greece imposed deeply resented austerity measures to cut its budget deficits - slashing pensions and salaries while raising taxes and retirement ages.
But it soon became clear that the cutbacks were not working and loans were not enough, and in October a second 130 billion-euro deal was agreed upon, although the details remain to be fully worked out.
Venizelos met yesterday with representatives of the European Commission, the European Central Bank and the International Monetary Fund, on whose assessments Greece's cash lifeline depends.
"The discussions are difficult and critical. The country must take very important decisions. There is no room for any evasion," Venizelos said during a news conference in Athens.
The second agreement provides for a 100 billion-euro debt writedown by private holders of Greek government bonds, on which complex talks with banks started last month and are expected to take several more weeks.
Yesterday, Venizelos also met Charles Dallara, managing director of the Institute of International Finance global bank lobbying group, who is leading talks with Athens on the writedown.
Greece is heading for a fourth year of recession, amid high taxation and growing unemployment, which is hampering its efforts to restore fiscal health by drastically containing government overspending.
"The recession is worse than any prediction. We are in out third successive year of recession and heading to a fourth," Venizelos said, adding that "for this to end the atmosphere must change. Banks must feel secure, and we must fully fulfill the decisions of October 26.
Greece was granted a first, 110 billion euro (US$147 billion) bailout package by its European partners and the IMF last year. That became necessary after years of government overspending and tricky data reporting provoked repeated credit downgrades, which made it too expensive for the country to borrow from money markets.
The May 2010 deal staved off bankruptcy, and in return Greece imposed deeply resented austerity measures to cut its budget deficits - slashing pensions and salaries while raising taxes and retirement ages.
But it soon became clear that the cutbacks were not working and loans were not enough, and in October a second 130 billion-euro deal was agreed upon, although the details remain to be fully worked out.
Venizelos met yesterday with representatives of the European Commission, the European Central Bank and the International Monetary Fund, on whose assessments Greece's cash lifeline depends.
"The discussions are difficult and critical. The country must take very important decisions. There is no room for any evasion," Venizelos said during a news conference in Athens.
The second agreement provides for a 100 billion-euro debt writedown by private holders of Greek government bonds, on which complex talks with banks started last month and are expected to take several more weeks.
Yesterday, Venizelos also met Charles Dallara, managing director of the Institute of International Finance global bank lobbying group, who is leading talks with Athens on the writedown.
Greece is heading for a fourth year of recession, amid high taxation and growing unemployment, which is hampering its efforts to restore fiscal health by drastically containing government overspending.
"The recession is worse than any prediction. We are in out third successive year of recession and heading to a fourth," Venizelos said, adding that "for this to end the atmosphere must change. Banks must feel secure, and we must fully fulfill the decisions of October 26.
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