Good progress on eco­nomic re­view

EU mulling of­fer­ing in­vestors in­cen­tives to hold bonds; Vi­enna-style sys­tem may be agreed upon

Kathimerini English - - BUSINESS & FINANCE -

The Euro­pean Com­mis­sion said yes­ter­day there had been “good progress” in dis­cus­sions be­tween Greece and in­ter­na­tional ex­perts eval­u­at­ing the coun­try’s fi­nances and eco­nomic prospects, ant that it was await­ing con­clu­sions “in the com­ing days.”

Spe­cial­ists from the Euro­pean Union’s ex­ec­u­tive branch, the Euro­pean Cen­tral Bank and the In­ter­na­tional Mon­e­tary Fund are in Athens con­duct­ing a quar­terly re­view of Greek mea­sures to plug a multi-bil­lion-euro hole in its deficit re­duc­tion plans and growth.

They are re­port­ing back on the readi­ness of the gov­ern­ment in Athens to de­liver on prom­ises and there­fore to re­ceive the next 12 bil­lion eu­ros in loans from its eu­ro­zone part­ners and the IMF un­der a 110-bil­lion-euro bailout agreed last year.

“We are mak­ing good progress,” said Amadeu Altafaj, spokesman for EU Eco­nomic Af­fairs Com­mis­sioner Olli Rehn. “There is no ma­jor dis­agree­ment but still work to be done. We’re still ex­pect­ing con­clu-


eco­nomic sions in the com­ing days,” he said, with­out go­ing into de­tails.

Greece’s Euro­pean part­ners have been pres­sur­ing Athens for weeks to step up a pro­gram of state sell-offs, aim­ing to raise 50 bil­lion eu­ros to­ward the long-term ob­jec­tive of re­bal­anc­ing its econ­omy and get­ting a pub­lic debt ap­proach­ing 350 bil­lion eu­ros onto a sus­tain­able path. Dis­cus­sions across Euro­pean cap­i­tals are also on­go­ing over moves to sharpen the col­lec­tion of taxes, amid work on a pos­si­ble sec­ond bailout.

Ac­cord­ing to un­named sources, Greek bond­hold­ers may be of­fered in­cen­tives to roll over ma­tur­ing debt with­out trig­ger­ing a credit rat­ing down­grade that would roil Europe’s bank­ing sys­tem. Op­tions be­ing ex­am­ined in­clude of­fer­ing in­vestors pre­ferred sta­tus, higher coupon pay­ments or col­lat­eral as in­duce­ments to buy bonds re­plac­ing Greek debt ma­tur­ing be­tween 2012 and 2014.

Late on Tues­day, Rehn said a Vi­enna-style sys­tem could be agreed upon with banks, which would mean they vol­un­tar­ily agree to main­tain ex­po­sure to Greece that would resched­ule the debt.

The Vi­enna-in­spired plan was a key plank in the IMF-spon­sored res­cues of Hun­gary, Ro­ma­nia, Latvia and Ser­bia in 2009. Un­der the plan, banks pub­licly pledged to keep their units in those coun­tries afloat by rolling over fund­ing and pro­vid­ing fresh cap­i­tal if needed. The Vi­enna plan has drawn less hos­tile re­views from mon­e­tary pol­i­cy­mak­ers than a debt “re­pro­fil­ing” – or con­vinc­ing bond­hold­ers to vol­un­tar­ily ac­cept an ex­ten­sion of ma­tu­ri­ties. The re­pro­fil­ing op­tion is still be con­sid­ered.

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