Mar­kets re­lieved af­ter suc­cess­ful di­a­logue

Kathimerini English - - Business & Finance -

The suc­cess­ful end to the month­long ne­go­ti­a­tions be­tween Greece and rep­re­sen­ta­tives from the Euro­pean Com­mis­sion, Euro­pean Cen­tral Bank and the In­ter­na­tional Mon­e­tary Fund on the coun­try’s eco­nomic progress saw the mar­kets breathe a sigh of re­lief yes­ter­day.

An af­ter­noon state­ment by the Fi­nance Min­istry that the talks had reached a sat­is­fac­tory con­clu­sion trig­gered a pos­i­tive mar­ket re­sponse, al­though the pre­vail­ing view is that the 110-bil­lion-euro pack­age will not be enough to cover Greece’s needs.

The euro pushed up to a day high of $1.4585 af­ter the state­ment was re­leased, while Greece’s bor­row­ing costs eased dur­ing the day in an­tic­i­pa­tion of the news, with yields on 10year Greek bonds drop­ping some 60 ba­sis points to 16.2 per­cent. Stocks also saw a rise late in the day.

Ef­fec­tively locked out of rais­ing money through the sale of its bonds be­cause of pro­hib­i­tively high in­ter- est rates, Greece will need an­other bailout, which re­ports put at up to 65 bil­lion eu­ros.

The min­istry said in a state­ment that the talks con­cerned how well Greece is stick­ing to con­di­tions set out in the orig­i­nal bailout pack­age, its midterm plan, fur­ther fis­cal mea­sures needed to meet 2011 goals, the pri­va­ti­za­tion pro­gram and struc­tural re­forms needed to help se­cure growth and boost com­pet­i­tive­ness.

The Greek gov­ern­ment is seek­ing to nar­row its deficit to 7.5 per­cent of gross do­mes­tic prod­uct by the end of this year, from the 10.5 per­cent it stood at in 2010. To achieve that, Fi­nance Min­is­ter Gior­gos Pa­pa­con­stanti­nou last month an­nounced ad­di­tional aus­ter­ity mea­sures worth about 6.4 bil­lion eu­ros for this year.

The texts de­tail­ing the mea­sures are to be fi­nal­ized “in the com­ing days” and will be sub­mit­ted to Par­lia­ment af­ter be­ing ap­proved by the Cabi­net, the min­istry added.

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