Athens needs to step up ef­forts, if re­port de­mands

Kathimerini English - - Business & Finance -

The Greek gov­ern­ment must step up its ef­forts to get pub­lic fi­nances un­der con­trol if a re­port due later this week shows Greece failed to com­ply with the terms of an in­ter­na­tional aid pro­gram, Ger­many’s Fi­nance Min­istry said yes­ter­day. If it turns out as ex­pected that Greece is not ful­fill­ing the pro­gram con­di­tions, euro-re­gion coun­tries must see what steps Greece can un­der­take to get back on track on top of what it’s do­ing al­ready, a Ger­man Fi­nance Min­istry spokesman said, speak­ing on cus­tom­ary con­di­tion of anonymity. The re­port by the Euro­pean Com­mis­sion, the In­ter­na­tional Mon­e­tary Fund and the Euro­pean Cen- tral Bank will be pub­lished on Fri­day at the ear­li­est, the spokesman said. Any fur­ther con­clu­sions can only be drawn af­ter that, he said. The min­istry com­ments re­it­er­ate a po­si­tion first out­lined by Fi­nance Min­is­ter Wolf­gang Schaeu­ble on April 14, show­ing that Ger­many’s stance on Greek aid is un­changed. Prime Min­is­ter Ge­orge Pa­pan­dreou has pre­sented a fifth round of bud­get cuts in a bid to ac­cess the fifth in­stall­ment of Greece’s 110-bil­lion-euro res­cue ($158 bil­lion). Ger­man 10-year gov­ern­ment bonds fell for the first day in five amid spec­u­la­tion that Euro­pean of­fi­cials will ap­prove ad­di­tional aid for Greece as part of ef­forts to counter the re­gion’s debt cri­sis. The euro rose to a two-week high against the dol­lar af­ter The Wall Street Jour­nal re­ported that Ger­many may drop its push for a reschedul­ing of Greek debt as a pre­con­di­tion for a new aid pack­age. Talks with the Greek gov­ern­ment are tak­ing place about a vol­un­tary con­tri­bu­tion of pri­vate cred­i­tors to a so­lu­tion of Greece’s debt prob­lems, Reuters cited Schaeu­ble as say­ing in Hanover yes­ter­day. The dis­cus­sions also in­volve more pri­va­ti­za­tions, big­ger ef­forts by Greece to re­duce the deficit as well as the pro­vi­sion of eco­nomic stim­uli, Schaeu­ble said. Cred­i­tors to Greece “should think about whether they’re in a po­si­tion to of­fer new loan con­di­tions” if the Greek gov­ern­ment agrees to boost its pri­va­ti­za­tion pro­gram, Michael Meis­ter, the fi­nance pol­icy spokesman in par­lia­ment for Chan­cel­lor An­gela Merkel’s Chris­tian Demo­cratic Union, said in an in­ter­view last week.

(Bloomberg) prospect of be­ing able to pay off its debts be­cause it has such a strong in­ter­na­tional busi­ness base.” Ire­land’s econ­omy is strug­gling to ex­pand as con­sumers spend less amid gov­ern­ment cut­backs and higher prices. The econ­omy will prob­a­bly re­turn to an­nual growth next year as con­sumers re­pair their per­sonal fi­nances and ex­ports gain, Gib­son said. “It is much more likely that the debts will be re­paid in full, but at prob­a­bly a more mod­est in­ter­est rate or over a longer time frame,” Gib­son said, adding that he ex­pects the econ­omy to con­tract 2.3 per­cent this year as “the head­winds are too sig­nif­i­cant.” (Bloomberg) stricken nation fails to re­as­sure in­vestors, ac­cord­ing to Com­merzbank AG. “In­ter­me­di­ate to longer-term Greek gov­ern­ment bonds will re­quire an im­mense risk pre­mium for the time be­ing,” Christo­pher Rieger, head of fixed-in­come strat­egy in Frank­furt, said in an in­ter­view with Mark Bar­ton on Bloomberg Tele­vi­sion’s “On the Move.” “A new deal is likely to carry a ma­tu­rity of two to three years so 2013 is still a very key year. I think the risks are very real that by that time the debt will need to be re­struc­tured.” Greek debt ad­vanced yes­ter­day af­ter the head of the euro-re­gion group of fi­nance min­is­ters Jean-Claude Juncker yes­ter­day said a “de­fin­i­tive an­swer” to the nation’s debt cri­sis should be reached by the end of June. (Bloomberg)

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