Greece to outline new austerity measures
By Lefteris Papadimas |
June 3, 2011, Friday
|
Print Edition
Print Edition
GREECE intends to present a fresh austerity plan today, a government official said, after Moody's cut its credit rating deep into junk territory and said there was an even chance of eventual default.
Greece has agreed to 6.4 billion euros (US$9.2 billion) of new savings, including some tax rises, to eat into its debt mountain. The budget plan will also include a faster pace of privatization, the senior official said.
Talks between Athens and inspectors from the European Commission, European Central Bank and International Monetary Fund are expected to wind up today and Prime Minister George Papandreou will present the details to Luxembourg's Jean-Claude Juncker, who chairs the group of eurozone finance ministers.
Greece signed up to a 110 billion euro bailout in May last year and as well as working to secure the latest portion of that, is discussing a second rescue deal that could total some 65 billion euros to tide it over through 2013.
Greek officials are hopeful the "troika" of institutions will now release a 12 billion euro loan tranche Athens needs to cover its immediate funding needs.
Minds will be concentrated after ratings agency Moody's downgraded Greece by three notches deep into junk territory, citing a growing risk that Athens would have to restructure its debt and impose losses on private investors.
Short-dated Greek bond yields were up to 45 basis points higher yesterday, while the cost of insuring against a default rose 40 basis points to 1,470.
"It looks increasingly likely some sort of package will be cobbled together," said Nick Stamenkovic, rate strategist at RIA Capital Markets. "But until then investors are wary and there's a huge amount of uncertainty given the political problems."
EU and ECB policymakers have differed over the shape of a second rescue, with the latter arguing firmly against any form of debt restructuring.
ECB hawk Juergen Stark offered a glimmer of compromise on Wednesday, saying a voluntary deal for investors to keep renewing their Greek debt holdings might be acceptable as part of a broader package. His intervention may help ease the way to a further bailout but there is still no sign of consensus between Greek political parties, demanded by the EU as a condition for further help.
IMF officials had warned over the past week that the global lender would not pay up its part of the latest aid tranche unless Greece's 2012 funding gap was addressed, forcing eurozone governments to come up with a broader financing plan.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
