Athens needs to step up efforts, if report demands
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)