Greece is to get a vital slice of aid next month to avoid default, international lenders said on Friday, while the EU raised the prospect of expanding the bailout of the eurozone state.
The European Commission, the European Central Bank (ECB) and the IMF, ending a month-long review of their 110 billion euro (US$160 billion) bailout program, said Athens had made considerable progress toward repairing its finances, but must step up fiscal and economic reforms.
“Once this process is concluded and following approval by the IMF’s Executive Board and the Eurogroup, the next tranche will become available, most likely, in early July,” they said.
Greek Finance Minister George Papaconstantinou has said Athens will be unable to meet its obligations from the middle of next month if it does not get the next 12 billion euro tranche of its bailout loan. The money was originally due for release on June 29.
Separately, the chairman of eurozone finance ministers held out the prospect of additional aid for Greece beyond the original bailout, which was agreed in May last year.
“I expect the Eurogroup to agree to additional finance being provided to Greece under strict conditionality,” Luxembourg Prime Minister Jean-Claude Juncker said after talks with Greek Prime Minister George Papandreou in Luxembourg.
The new plan will for the first time include involvement of private sector investors in helping Greece on a voluntary basis, Juncker said.
He did not elaborate and sources close to the talks said the way in which private investors would be involved was still being debated by EU and ECB officials. Some form of debt rollover, in which investors would maintain their exposure through purchases of Greek bonds when existing ones mature, appears the most likely outcome.
Greek newspaper Kathimerini said a new three-year bailout package for Greece, to run until mid-2014, would total 85 billion euros, of which the EU and the IMF would provide less than half. The rest of the money would come from sales of Greek state assets and a private sector debt rollover, it said.
Papandreou presented to Juncker a medium-term budget plan featuring deeper spending cuts, measures to boost revenues and a faster sell-off of state assets, to be managed by an independent privatization agency.
EU Monetary Affairs Commissioner Olli Rehn said Greece’s latest fiscal commitments were “essential” to restoring the sustainability of its finances, and could lead to additional aid.
Athens has veered off course in its current bailout program because of a revenue shortfall due to a deep recession and chronic tax evasion, requiring extra steps worth 6.4 billion euros or 2.8 percent of GDP this year.
The Greek finance ministry said the government would finalize new fiscal measures in the coming days, putting them to parliament after the Cabinet approves them.
The new steps face rising opposition from trade unions and youth protesters, as well as from some back-bench members of Papandreou’s governing PASOK socialist party.
Increased European funding for Greece could face resistance in the parliaments of fiscally conservative northern states, especially Germany and the Netherlands.
Taxpayers in donor countries have so far borne the burden of rescuing Greece and fellow eurozone members Ireland and Portugal.
Some European politicians and economists argue that investors in Greek government bonds must do more than simply accept a rollover. Claudio Loser, a former director of the Western Hemisphere for the IMF, said the fund should push harder for Greece to restructure its debt and negotiate “haircuts,” or reductions in the value of bonds, with investors.
However, the ECB has fought that idea, fearing it would trigger a violent chain reaction in financial markets far beyond Greek borders and provoke a crisis among European banks which hold a large amount of Greek debt.
However, most market economists polled by Reuters believe Greece’s 340 billion euro debt mountain is unsustainable and will have to be restructured sooner or later. Without a restructuring an expanded bailout of Athens may simply buy time without solving Greece’s underlying problem.
“I think [official lenders] have a plan in their head that is reasonable for kicking the can down the road another three months,” said Gianluca Salford, European fixed income strategist at JPMorgan.
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li
Dutch brewing company Heineken NV on Friday announced an investment of NT$13.5 billion (US$414.62 million) over the next five years in Taiwan. The first multinational brewing company to operate in Taiwan, Heineken made the statement at a ceremony held at its brewery in Pingtung County. It also outlined its efforts to make the brewery “net zero” by 2030. Heineken has been in the Taiwanese market for 20 years, Heineken Taiwan managing director Jeff Wu (吳建甫) said. With strong support from local consumers, the Dutch brewery decided to transition from sales to manufacturing in the country, Wu said. Heineken assumed majority ownership and management rights
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI