Tue, Aug 07, 2012 - Page 15 News List

New plan to boost Greek finance deal

NUMBERS GAME:The European nation, which has faced harsh austerity measures in the wake of a banking-induced crisis, may get new euro funding


An activist from the Occupy movement wears a Guy Fawkes mask during a protest in front of the European Central Bank’s headquarters in Frankfurt, Germany, on Thursday.

Photo: EPA

Greece and its international creditors agreed on the need to strengthen policy efforts to support the economy and comply with its bailout terms after nearly two weeks of meetings in Athens.

Representatives from the so-called troika of the European Commission, European Central Bank (ECB) and IMF met with Greek Finance Minister Yannis Stournaras in the Greek capital on Sunday at the conclusion of the meetings. The talks will determine whether Greece continues receiving funds from the country’s 240 billion euro (US$297 billion) rescue package.

“The discussions on the implementation of the program were productive and there was an overall agreement on the need to strengthen policy efforts to achieve its objectives,” the troika institutions said in a joint statement on Sunday.

Inspectors from the country’s creditors will return to Athens early next month to continue the talks.

Greek Prime Minister Antonis Samaras on Wednesday last week wrenched agreement from the two party leaders supporting his coalition government on the need to determine 11.5 billion euros of budget cuts for next year and 2014 to keep the international rescue funds flowing. That package must be completed by early next month, before a meeting of finance ministers from the 17-nation euro area, a Greek Finance Ministry official, who asked not to be named, said after Sunday’s meeting.

“We made a lot of good progress,” the IMF representative Poul Thomsen said in Athens. “We’ll take a break now and come back in early September.”

Greece is in its fifth year of a recession that has been worsened by the austerity measures to cut a budget deficit that reached more than five times the eurozone’s limit in 2009, sparking the continent’s debt crisis. The country conducted the biggest sovereign-debt restructuring in history this year before elections in May and June plunged it into political turmoil and put its place in the euro bloc at risk.

The troika representatives have been in Athens since July 24 meeting with ministers and political leaders to determine whether Greece is meeting the conditions to get the next batch of funds. The country risks running out of money without the disbursement of 4.2 billion euros that was initially due in June as the first instalment of a 31 billion-euro transfer.

Greece was set to sell 625 million euros of 26-week Treasury bills today. The country may sell 6 billion euros of such bills this month, 2 billion euros more than initially planned and tap bank recapitalization funds in order to cover its financing needs, Kathimerini reported on Aug. 1, without saying how it got the information.

The Greek government is seeking the fund to pay 3.2 billion euros of redemptions for bonds which are held by the ECB and which are set to mature on Aug. 20, the Athens-based newspaper said.

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