Athens might need more help
Government admits it could require further financial support from EU partners as audit by creditors looms
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.”