Troika ends check of Greek reforms
Source: Agencies |
October 12, 2011, Wednesday
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Print Edition
Print Edition
GREECE'S international debt inspectors have completed their review of the government's reforms, and if its conclusions are adopted by the eurozone and IMF, the country is likely to receive the next batch of its bailout loans in early November.
The inspectors from the International Monetary Fund, European Commission and European Central Bank, collectively known as the troika, said yesterday that Greece's deficit targets for 2011 were "no longer within reach," but that additional measures announced were adequate for 2012. They said additional measures would be needed for 2013-2014.
Meanwhile, Greece's bondholders may have to settle for a cut of more than 60 percent in what Athens owes them, the head of the eurozone's finance ministers has said, the first open admission that such a drastic move is being considered.
Jean-Claude Juncker, who is also prime minister of Luxembourg, was quoted late Monday by Austrian state broadcaster ORF as saying that eurozone countries are "talking about more" than a 50 to 60 percent haircut for Greece.
Experts and investors believe Greece's debt situation is untenable, even with more reforms and austerity measures, and will need to write off some of the money it owes bondholders.
Greece's second bailout, which was agreed in July but has yet to be finalized, proposed a 21 percent cut in bond repayments. Economists, however, say a 50 percent reduction would be necessary. Juncker's suggestion for a sharper cut is the first admission by a high-ranking official that even more is needed to save Greece.
Juncker said that, unlike financial markets, EU politicians were slow to react to the debt crisis, adding there is no "historical experience" for the present situation.
As the debt inspectors ended their checks, protests caused more disruption in Athens.
Workers at a key refinery went on strike, sending motorists who feared a fuel shortage to form huge lines at gas stations to fill up. A strike by municipal workers has left garbage piling up on city streets for days. Protesters have also staged sit-ins of state buildings, including those of the water company.
Greece has been locked out of the international bond market for over a year due to the high interest rates demanded for its bonds, but regularly issues short-term treasury bills.
The country raised 1.3 billion euros yesterday in the auction of 26-week treasury bills at an interest rate of 4.86 percent, marginally higher than the 4.8 percent yield in a similar sale on September 6, the debt management agency said.
Demand was also slightly lower, with yesterday's sale 2.73 times oversubscribed compared to 3.02 times in September.
The inspectors from the International Monetary Fund, European Commission and European Central Bank, collectively known as the troika, said yesterday that Greece's deficit targets for 2011 were "no longer within reach," but that additional measures announced were adequate for 2012. They said additional measures would be needed for 2013-2014.
Meanwhile, Greece's bondholders may have to settle for a cut of more than 60 percent in what Athens owes them, the head of the eurozone's finance ministers has said, the first open admission that such a drastic move is being considered.
Jean-Claude Juncker, who is also prime minister of Luxembourg, was quoted late Monday by Austrian state broadcaster ORF as saying that eurozone countries are "talking about more" than a 50 to 60 percent haircut for Greece.
Experts and investors believe Greece's debt situation is untenable, even with more reforms and austerity measures, and will need to write off some of the money it owes bondholders.
Greece's second bailout, which was agreed in July but has yet to be finalized, proposed a 21 percent cut in bond repayments. Economists, however, say a 50 percent reduction would be necessary. Juncker's suggestion for a sharper cut is the first admission by a high-ranking official that even more is needed to save Greece.
Juncker said that, unlike financial markets, EU politicians were slow to react to the debt crisis, adding there is no "historical experience" for the present situation.
As the debt inspectors ended their checks, protests caused more disruption in Athens.
Workers at a key refinery went on strike, sending motorists who feared a fuel shortage to form huge lines at gas stations to fill up. A strike by municipal workers has left garbage piling up on city streets for days. Protesters have also staged sit-ins of state buildings, including those of the water company.
Greece has been locked out of the international bond market for over a year due to the high interest rates demanded for its bonds, but regularly issues short-term treasury bills.
The country raised 1.3 billion euros yesterday in the auction of 26-week treasury bills at an interest rate of 4.86 percent, marginally higher than the 4.8 percent yield in a similar sale on September 6, the debt management agency said.
Demand was also slightly lower, with yesterday's sale 2.73 times oversubscribed compared to 3.02 times in September.
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