Race on to avoid Greek de­fault

EU sources say emer­gency talks held over week­end, work­ing on new 65-bln-euro deal for Athens

Kathimerini English - - Business & Finance -

The Euro­pean Union is work­ing on a sec­ond bailout pack­age for Greece in a race to re­lease vi­tal loans next month and avert the risk of the eu­ro­zone coun­try de­fault­ing, EU of­fi­cials said yes­ter­day.

Se­nior of­fi­cials held unan­nounced emer­gency talks with the Greek gov­ern­ment over the week­end, an EU source said, ac­cord­ing to Reuters.

EU of­fi­cials said a new 65-bil­lioneuro pack­age could in­volve a mix­ture of col­lat­er­al­ized loans from the EU and the In­ter­na­tional Mon­e­tary Fund, as well as ad­di­tional rev­enue mea­sures, with un­prece­dented in­tru­sive ex­ter­nal su­per­vi­sion of Greece’s pri­va­ti­za­tion pro­gram.

“It would re­quire col­lat­eral for new loans and EU tech­ni­cal as­sis­tance – EU in­volve­ment in the pri­va­ti­za­tion process,” one se­nior EU of­fi­cial told the news agency.

Ex­tra fund­ing for Greece faces fierce po­lit­i­cal re­sis­tance from fis­cal con­ser­va­tives and na­tion­al­ists in key north Euro­pean cred­i­tor coun­tries – Ger­many, the Nether­lands and Fin­land – com­pli­cat­ing the EU gov­ern­ments’ task.

Dutch Fi­nance Min­is­ter Jan Kees de Jager on Satur­day warned Greece that it risks fail­ing to re­ceive the next batch of bailout loans promised by in­ter­na­tional len­ders. In the Cypriot city of Li­mas­sol, the Dutch min­is­ter urged Greece to fully com­ply with the mea­sures and con­di­tions the IMF has laid down, re­fer­ring to fur­ther aus­ter­ity mea­sures and struc­tural re­forms. “If it does not, Hol­land, Ger­many and Fin­land will fol­low the IMF should it de­cide not to give more money to Greece,” he said. “This may sound like a tough line but it is a right one,” de Jager added. More on the Greek debt cri­sis came out from the Fi­nan­cial Times, which re­ported yes­ter­day that Euro­pean Union lead­ers are ne­go­ti­at­ing a deal that would lead to un­prece­dented out­side in­ter­ven­tion in the Greek econ­omy, in­clud­ing in­ter­na­tional in­volve­ment in tax col­lec­tion and the pri­va­ti­za­tion of state as­sets, in ex­change for new bailout loans for Athens.

“Peo­ple in­volved in the talks said the pack­age would also in­clude in­cen­tives for pri­vate hold­ers of Greek debt vol­un­tar­ily to ex­tend Athens’s re­pay­ment sched­ule, as well as an­other round of aus­ter­ity mea­sures,” claimed the news­pa­per with­out nam­ing its sources.

There is doubt that Greece will be able to re­turn to the fi­nan­cial mar­kets to raise money in March as fore­seen in the loan mem­o­ran­dum it signed last year, which means that the IMF would be for­bid­den from dis­tribut­ing any ad­di­tional funds. With­out the IMF funds, eu­ro­zone gov­ern­ments would ei­ther be forced to fill the gap or Athens could de­fault.

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