Tough love over Greek debts
Source: Agencies |
April 25, 2010, Sunday
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Print Edition
Print Edition
GLOBAL finance officials are sending debt-ridden Greece a tough love message: no emergency loans unless the country adopts an economic austerity overhaul.
The escalating crisis was expected to dominate discussions as finance ministers on the steering committee of the 186-nation International Monetary Fund held a daylong meeting yesterday that was part of the regular spring gathering of the IMF and World Bank.
Greece's finance minister, George Papaconstantinou, planned meetings with the IMF's managing director, Dominique Strauss-Kahn, as well as United States Treasury Secretary Timothy Geithner and officials from Russia and Brazil.
Crippled by soaring borrowing costs, Greece triggered an emergency aid plan on Friday to draw cash from the IMF and countries that use the euro. There's enough money in the package to prevent Greece from defaulting on its debts. Eurozone members will contribute US$40 billion, while the IMF will provide US$13.4 billion this year.
Greece is putting in place an austerity program that cuts civil servants' pay, freezes pensions and raises taxes. But the country faces years of painful cutbacks and doubts about its long-term finances.
The IMF is expediting a review of Greece's request for emergency aid.
"You can read a much greater sense of urgency, and that is welcome," Geithner said on Friday after a meeting of finance officials from the Group of 20 countries. "Based on what I heard, they are going to move much more quickly to put in place a strong package of reforms."
The G20 is composed of the world's wealthiest industrial countries plus major emerging economies such as China, Brazil, India, South Korea and Russia.
Greece's debt crisis is a "source of concern," Canadian Finance Minister Jim Flaherty said. But the G20 didn't directly address the matter in their joint statement.
The EU's monetary affairs commissioner, Ollie Rehn, briefed the G20 officials on the Greek aid plan. The Greek crisis "has potential implications for financial stability in the European Union and globally." Rehn said he believed the EU-IMF aid package could be completed by early May.
The escalating crisis was expected to dominate discussions as finance ministers on the steering committee of the 186-nation International Monetary Fund held a daylong meeting yesterday that was part of the regular spring gathering of the IMF and World Bank.
Greece's finance minister, George Papaconstantinou, planned meetings with the IMF's managing director, Dominique Strauss-Kahn, as well as United States Treasury Secretary Timothy Geithner and officials from Russia and Brazil.
Crippled by soaring borrowing costs, Greece triggered an emergency aid plan on Friday to draw cash from the IMF and countries that use the euro. There's enough money in the package to prevent Greece from defaulting on its debts. Eurozone members will contribute US$40 billion, while the IMF will provide US$13.4 billion this year.
Greece is putting in place an austerity program that cuts civil servants' pay, freezes pensions and raises taxes. But the country faces years of painful cutbacks and doubts about its long-term finances.
The IMF is expediting a review of Greece's request for emergency aid.
"You can read a much greater sense of urgency, and that is welcome," Geithner said on Friday after a meeting of finance officials from the Group of 20 countries. "Based on what I heard, they are going to move much more quickly to put in place a strong package of reforms."
The G20 is composed of the world's wealthiest industrial countries plus major emerging economies such as China, Brazil, India, South Korea and Russia.
Greece's debt crisis is a "source of concern," Canadian Finance Minister Jim Flaherty said. But the G20 didn't directly address the matter in their joint statement.
The EU's monetary affairs commissioner, Ollie Rehn, briefed the G20 officials on the Greek aid plan. The Greek crisis "has potential implications for financial stability in the European Union and globally." Rehn said he believed the EU-IMF aid package could be completed by early May.
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