Japanese Finance Minister Jun Azumi yesterday called for the swift and transparent passage of a rescue package for Greece, to reassure markets and help stem the yen’s recent surge against the euro.
“We are seeing an extremely high yen and a weak euro,” Azumi told reporters at a press conference.
“The sense of uncertainty cannot be wiped out unless [euro member states] clearly show the market they are swiftly implementing the assistance scheme for Greece,” he said.
Photo: Bloomberg
Three of the eurozone’s 17 members have yet to pass the July 21 agreement that announced a second rescue plan for Greece and mentioned enhancing the European Financial Stability Facility (EFSF), the eurozone’s bailout fund.
Azumi’s comments came after eurozone finance ministers delayed a decision on giving Greece the next 8 billion euro (US$10.53 billion) tranche of bailout cash, which Athens needs to avoid a near-term default, until mid-month.
“All major non-eurozone economic players are becoming impatient about the eurozone’s ability to solve its debt problem,” said Ivan Tselichtchev, economist at the Japan Center for Economic Research.
“Japan is particularly impatient because as long as the problem will go on there will be upside pressure on the Japanese yen,” he added.
The eurozone’s finance chiefs indicated early yesterday that Greece will get a loan installment it needs to keep paying its bills, even after Athens admitted that it would not be able to cut its budget deficit as much as it had promised in return for help.
“We had no one advocating a default for Greece. Everything will be done to avoid that and it will be avoided,” Luxembourg Prime Minister Jean-Claude Juncker, who also chairs the meetings of eurozone finance ministers, said after talks that ran late into the night.
Juncker said the other ministers would decide on the payment of the 8 billion euro slice of its first 110 billion euro (US$114.89 billion) bailout “in the course of October,” adding that the country would be able to meet its financial obligations as long as it receives the money next month.
However, Swedish Finance Minister Anders Borg warned yesterday that Greece risks missing budget targets demanded by international lenders in return for bailout funds.
“It is quite clear that there is an evident risk that the Greek program is off track,” Borg said as he arrived for a meeting of EU finance ministers.
“We have to rethink how we can move faster forward towards backstops and firewalls to handle the situation,” he said amid fears that Greece is heading towards a default that could devastate the eurozone.
He said banks may have to be recapitalized to cope with the crisis.
Inspectors from the European Commission, the European Central Bank and the IMF are in Athens to inspect Greece’s finances and are expected to complete their report by the end of the week.
Asian markets mostly tumbled yesterday after Wall Street slumped to its lowest level for more than a year as fears grow that Greece will default and the eurozone debt crisis will spread.
Tokyo fell 1.05 percent, or 89.36 points, to 8,456.12, while Seoul slumped 3.59 percent, or 63.46 points, to 1,706.19.
Sydney ended 0.64 percent, or 24.9 points, lower at 3,872.1 and Hong Kong was 0.64 percent down a day after the index slumped to its lowest level in more than two years. Shanghai was closed for a public holiday.
The beleaguered euro hit a fresh 10-year low of ￥100.88 yesterday in early Tokyo trade, after falling to an eight-month low versus the US dollar on Monday.
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