Greece to ask for austerity plan extension: report


Thu, Aug 16, 2012 - Page 15

Greek Prime Minister Antonis Samaras will call for an extension to the nation’s austerity program when he meets with German Chancellor Angela Merkel and French President Francois Hollande next week, the Financial Times reported yesterday.

Samaras will hold talks with Merkel and Hollande in Berlin and will suggest that public spending cuts be spread over four years instead of two, according to a document seen by the paper,


Greece is currently scrambling to find budget cuts — amounting to about 5 percent of GDP — to be implemented next year and in 2014 as part of its existing bailout deal with the EU and the IMF.

Greece raised 4.063 billion euros (US$5 billion) in a sale of three-month treasury bills on Tuesday, paying a modestly higher rate of 4.43 percent, the public debt management agency said.

The extraordinarily large sale should help the Greek government avoid a cash crunch, according to a finance ministry source, as it faces redemption of a 3.2 billion euro bond held by the ECB that expires on Monday and awaits the next installment of its EU-IMF bailout package.

Greece has been shut out of the long-term debt markets since 2010 and has regularly issued short-term debt.


Relying for its economic survival on EU-IMF bailout loans, Greece is waiting for the next installment of nearly 31.5 billion euros as a political deadlock, the result of back-to-back elections, has thrown its reform program off track.

Auditors from the country’s international creditors, who visited Greece late last month, are expected to return next month.