Rehn con­fi­dent on next aid tranche

France’s Sarkozy urges Euro­pean lead­ers to find a com­pro­mise on debt cri­sis to sta­bi­lize euro

Kathimerini English - - Business & Finance -

Greece will re­ceive its next aid pay­ment in early July, while a con­sen­sus is emerg­ing on how to in­volve pri­vate bond­hold­ers in a new res­cue pack­age, Euro­pean Union Eco­nomic and Mon­e­tary Af­fairs Com­mis­sioner Olli Rehn said yes­ter­day.

“We have been in very close con­tact with the IMF,” Rehn told Bloomberg.

“I’m con­fi­dent we can con­clude the re­view in the com­ing days, by Sun­day, and we can thus take the de­ci­sions on the dis- burse­ment re­spec­tively in the two or­ga­ni­za­tions, so this next dis­burse­ment can take place in early July.”

Greece is count­ing on 8.7 bil­lion eu­ros from Europe and 3.3 bil­lion eu­ros from the In­ter­na­tional Mon­e­tary Fund in July, while de­bate con­tin­ues in Euro­pean cap­i­tals over the con­tent of a longer-term aid pro­gram.

“We will be able to avoid any de­fault sce­nario,” Rehn said.

Bond­holder in­volve­ment in the Greek aid pack­age will be de- cided at a reg­u­lar meet­ing of Euro­pean fi­nance min­is­ters on July 11, he said.

“We will have to iron out the re­main­ing dif­fer­ences as re­gards the na­ture of pri­vate sec­tor in­volve­ment” at that meet­ing, Rehn said.

Greek bonds sta­bi­lized yes­ter­day af­ter Wed­nes­day’s drop sent reper­cus­sions through world mar­kets.

The yield on two-year Greek notes re­mained above 28 per­cent for the sec­ond day and rates on 10-year bonds rose 2 ba­sis points to 17.75 per­cent.

The euro dropped to three­week lows against the dol­lar and yen, and stocks fell in Europe and Asia.

Speak­ing yes­ter­day at a con­fer­ence of in­ter­na­tional farm­ers in Paris, French Pres­i­dent Ni­co­las Sarkozy urged other Euro­pean lead­ers to find a com­pro­mise on Greece’s debt cri­sis to sta­bi­lize the euro. “We must make these de­ci­sions now,” he stressed.

Sarkozy called on other EU lead­ers to make “nec­es­sary com­pro­mises” to “pre­serve the sta­bil­ity of the eu­ro­zone. Be­cause with­out sta­bil­ity, no growth is pos­si­ble.”

France’s three big­gest banks are at risk of a credit down­grade be­cause of ex­po­sure to Greek debt. Euro­pean of­fi­cials are talk­ing about more aid to keep Greece from de­fault­ing.

The Greek debt cri­sis is ex­pected to be at the cen­ter of talks be­tween Sarkozy and Ger­man Chan­cel­lor An­gela Merkel to­day.

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