Athens might need more help

Gov­ern­ment ad­mits it could re­quire fur­ther fi­nan­cial sup­port from EU part­ners as au­dit by cred­i­tors looms

Kathimerini English - - Front Page -

As top-rank­ing of­fi­cials rep­re­sent­ing Greece’s in­ter­na­tional cred­i­tors pre­pare to visit Athens to­mor­row for an in­spec­tion of fi­nances that will de­ter­mine whether or not the coun­try re­ceives the fifth tranche of loan fund­ing, the gov­ern­ment sought to quash spec­u­la­tion about an exit from the eu­ro­zone but ad­mit­ted that Athens might need fur­ther fi­nan­cial sup­port.

Prime Min­is­ter Ge­orge Pa­pan­dreou on Satur­day de­nied there had been any talks about Greece re­vert­ing to the drachma and asked that his coun­try be “left in peace to fin­ish its job.” The premier de­scribed the al­le­ga­tions that ap­peared in Ger­many’s Spiegel On­line on Fri­day as “bor­der­ing on the crim­i­nal.”

Fi­nance Min­is­ter Gior­gos Pa­pa­con­stanti­nou, who at­tended Fri­day’s un­of­fi­cial meet­ing of eu­ro­zone fi­nance min­is­ters in Lux­em­bourg called by Eurogroup pres­i­dent Jean-Claude Juncker, said later on Satur­day that min­is­ters had dis­cussed “the progress of im­ple­ment­ing Greece’s [fis­cal ad­just­ment] pro­gram.” He echoed Euro- pean Union of­fi­cials in deny­ing that a debt re­struc­tur­ing had been dis­cussed. How­ever it is thought that the op­tion of Greece re­ceiv­ing fur­ther loans from its cred­i­tors – the Euro­pean Com­mis­sion, the Euro­pean Cen­tral Bank and the In­ter­na­tional Mon­e­tary Fund – was de­bated. This was not con­firmed. But Pa­pa­con­stanti­nou ad­mit­ted Greece is ex­am­in­ing ways of eas­ing its debt bur­den, in­clud­ing the pos­si­bil­ity of a Euro­pean bailout fund buy­ing gov­ern­ment bonds, as it looks un­likely Athens will be able to ac­cess in- ter­na­tional mar­kets next year. The gov­ern­ment is some 1.2 bil­lion eu­ros short of rev­enue-rais­ing tar­gets aimed at plug­ging a bud­get deficit for 2010 of 10.5 per­cent of gross do­mes­tic prod­uct.

In an in­ter­view with Kathimerini’s GK mag­a­zine, IMF chief Do­minique Strauss-Kahn said Greece would emerge from the cri­sis if it pushes on with its aus­ter­ity drive and ruled out debt re­struc­tur­ing. He blamed Greece’s prob­lems on “years, if not decades, of mis­takes in eco­nomic pol­icy.”

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