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Greece set to get loans in time
Source: Agencies |
September 28, 2011, Wednesday
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GREECE will receive its next batch of bailout loans in time to avoid a disastrous default, the finance minister said yesterday, as stock markets rallied on hopes that the prime minister will discuss new ways of solving the crisis with Germany's leader later in the day.
Reports that European leaders are considering bolder moves to relieve Greece and other countries of their debt burden have buoyed spirits in financial markets, though officials in Chancellor Angela Merkel's government have downplayed such speculation.
The current plan is to have Greece implement painful debt-reduction measures in exchange for rescue loans.
Greece's international creditors are holding up payment of the next batch of those loans until a review of the reforms is completed in the coming days. Without the money, Greece faces bankruptcy in mid-October, potentially sending shock waves through the global financial sector.
"I am very confident in ... the disbursement of the sixth tranche," Finance Minister Evangelos Venizelos said, speaking above the sound of chanting from protesting tax office workers outside the ministry. "But we must do what has been agreed."
The minister said the country had already made great efforts to achieve its fiscal targets, but that a "hyper-effort" was necessary to fully meet its commitments.
Some experts, however, say the current course of austerity is untenable and that Greece will need bigger debt relief. Analysts say that could be achieved by imposing tougher losses on private bondholders, boosting capital in European banks that would take such losses, and boosting the size of the rescue fund.
Under the current plan, Greece had originally expected debt inspectors from the International Monetary Fund, the European Central Bank and the European Commission to complete a review in September and approve the sixth installment of loans from its 110 billion euro (US$149 billion) international bailout fund.
Reports that European leaders are considering bolder moves to relieve Greece and other countries of their debt burden have buoyed spirits in financial markets, though officials in Chancellor Angela Merkel's government have downplayed such speculation.
The current plan is to have Greece implement painful debt-reduction measures in exchange for rescue loans.
Greece's international creditors are holding up payment of the next batch of those loans until a review of the reforms is completed in the coming days. Without the money, Greece faces bankruptcy in mid-October, potentially sending shock waves through the global financial sector.
"I am very confident in ... the disbursement of the sixth tranche," Finance Minister Evangelos Venizelos said, speaking above the sound of chanting from protesting tax office workers outside the ministry. "But we must do what has been agreed."
The minister said the country had already made great efforts to achieve its fiscal targets, but that a "hyper-effort" was necessary to fully meet its commitments.
Some experts, however, say the current course of austerity is untenable and that Greece will need bigger debt relief. Analysts say that could be achieved by imposing tougher losses on private bondholders, boosting capital in European banks that would take such losses, and boosting the size of the rescue fund.
Under the current plan, Greece had originally expected debt inspectors from the International Monetary Fund, the European Central Bank and the European Commission to complete a review in September and approve the sixth installment of loans from its 110 billion euro (US$149 billion) international bailout fund.
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