Euro­pean fi­nance chiefs seek to close Greek gap amid IMF spat

The Pak Banker - - Front Page -


Euro­pean fi­nance min­is­ters aim to stitch to­gether Greece’s next aid pay­ment as a sput­ter­ing euro- area econ­omy and a spat with the In­ter­na­tional Mone­tary Fund cloud ef­forts to re­solve the debt cri­sis. The fi­nance chiefs meet in Brussels to­mor­row for the sec­ond time in a week af­ter they agreed seven days ago to keep Greece’s bailout aid flow­ing.

In ad­di­tion to a dis­agree­ment be­tween the Euro­pean Union and IMF over ex­tend­ing Greece’s debt-re­duc­tion tar­get, the min­is­ters will try to re-en­gi­neer the bailout with­out ask­ing tax­pay­ers to put up more money.

The talks are “likely to be tense as all play­ers set out their po­si­tions,” Thomas Costerg, an econ­o­mist at Stan­dard Char­tered in Lon­don, said in an e-mail. “Greece’s debt can is likely to be kicked fur­ther down the road, but we could see some con­struc­tive state­ments.”

The meet­ing of the min­is­ters from the 17-mem­ber euro area un­der­scores skir­mish­ing among EU of­fi­cials con­fronting ris­ing un­em­ploy­ment and a slow­ing econ­omy as they strug­gle with the three-year-old debt cri­sis. The talks pre­cede a Nov. 22-23 EU sum­mit to re­solve the bloc’s bud­get, a project threat­ened by a dis­pute with the U.K.

With tens of thou­sands of Euro­peans stag­ing protests last week against aus­ter­ity mea­sures and un­em­ploy­ment, shift­ing dy­nam­ics in other Euro­pean coun­tries could fore­shadow re­newed con­flict — an early elec­tion in Italy, a re­gional vote in Spain and an ap­proach­ing bailout pack­age for Cyprus.

Span­ish bonds fell last week, push­ing 10-year yields to the high­est level in six weeks, as a re­port showed the euro econ­omy was pushed into re­ces­sion in the third quar­ter. IMF Di­rec­tor Chris­tine La­garde took is­sue with Euro­pean gov­ern­ments’ de­ci­sion to push back Greece’s debt-re­duc­tion tar­get by two years to 2022 against the fund’s rec­om­men­da­tions, rais­ing ques­tions over whether the IMF would keep fi­nanc­ing Greece.

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