Ailing Greek banks seek extra support
By George Georgiopoulos and Harry Papachristou |
April 8, 2010, Thursday
|
Print Edition
Print Edition
Greek banks, hit by a series of credit rating downgrades linked to the country's debt crisis, have asked the government for more financial support, Finance Minister George Papaconstantinou said yesterday.
"The banks have asked to use the remaining funds of the support plan," he told reporters, referring to a package agreed by the previous conservative government in 2008.
About 17 billion euros (US$22.72 billion), mainly in state guarantees, remain in the 28 billion euro support scheme, launched to help Greek lenders cope with the global credit crisis.
The Central Bank of Greece said non-performing loans in the banking system rose further in the last quarter of 2009, bringing the full-year ratio to 7.7 percent.
The banks' plea for extra help highlighted the problems facing the entire Greek economy, which is expected to contract by at least 2 percent this year, partly as a result of austerity measures imposed to slash a huge budget deficit.
IMF officials began talks in Athens yesterday on implementing the austerity plan, just as the latest market jitters over Greece's ability to manage its debt mountain eased slightly, despite uncertainty over a eurozone rescue plan.
Greek borrowing costs hit a euro lifetime high on Tuesday, fueled by investors' skepticism of an EU-IMF financial safety net agreed last month, and by media reports of contradictory comments by anonymous finance officials.
"Unfortunately, too many unqualified people are speaking, talking off the top of their heads," Papaconstantinou told late-night television after denying Greece was seeking to renegotiate the rescue plan.
He said Greece could not go on borrowing at current rates but had no intention of using the emergency fund.
"The banks have asked to use the remaining funds of the support plan," he told reporters, referring to a package agreed by the previous conservative government in 2008.
About 17 billion euros (US$22.72 billion), mainly in state guarantees, remain in the 28 billion euro support scheme, launched to help Greek lenders cope with the global credit crisis.
The Central Bank of Greece said non-performing loans in the banking system rose further in the last quarter of 2009, bringing the full-year ratio to 7.7 percent.
The banks' plea for extra help highlighted the problems facing the entire Greek economy, which is expected to contract by at least 2 percent this year, partly as a result of austerity measures imposed to slash a huge budget deficit.
IMF officials began talks in Athens yesterday on implementing the austerity plan, just as the latest market jitters over Greece's ability to manage its debt mountain eased slightly, despite uncertainty over a eurozone rescue plan.
Greek borrowing costs hit a euro lifetime high on Tuesday, fueled by investors' skepticism of an EU-IMF financial safety net agreed last month, and by media reports of contradictory comments by anonymous finance officials.
"Unfortunately, too many unqualified people are speaking, talking off the top of their heads," Papaconstantinou told late-night television after denying Greece was seeking to renegotiate the rescue plan.
He said Greece could not go on borrowing at current rates but had no intention of using the emergency fund.
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