Saturday August 23, 2014 Search
Weather | Athens
32o C
25o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Top euro policymakers at odds over Greek debt fix

By Jussi Rosendahl & Philip Blenkinsop

The European Union's top economic official sought to rule out any write-off of Greece's debt to governments on Thursday after a European central banker said for the first time that a “haircut” on part of it was probable.

A row between eurozone governments and the International Monetary Fund over how to make Greece's giant debt mountain manageable is holding up the release of 31 billion euros ($39.5 billion) in emergency loans needed to keep Athens afloat.

IMF officials have argued privately that some write-down for eurozone governments is necessary to make Greece solvent but Germany, the biggest contributor to the bloc's bailout funds, has repeatedly rejected the idea of taking a loss on holdings of Greek debt, saying it would be illegal.

EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Helsinki: “The solution will be a combination of various elements, one is not enough.

“But it is essential that the principal not be touched. There is a strict unanimity on this within the eurozone.”

Rehn's comment contradicted European Central Bank Governing Council member Luc Coene, who was quoted by a Belgian daily as saying that a partial write-down of Greek debt was likely to happen eventually.

De Standaard said Coene made the comments in a debate with students at Ghent University on Wednesday. It did not publish a full quotation of his remark.

Greece's total debt is forecast to rise to 190 percent of gross domestic product next year, meaning it is highly unlikely to fall back to 120 percent of GDP by 2020, the level the IMF has said is the maximum sustainable in the long term.

Banks, insurers and other private investors holding about 206 billion euros of Greek bonds took a savage “haircut” on the nominal value of their securities earlier this year.

The eurozone's debt crisis began in Greece three years ago when a newly elected government disclosed that the country had knowingly understated its budget deficit.

Athens managed to sell nearly 1 billion euros in short-term bills on Thursday to complete raising the 5 billion euros it needs to pay off maturing paper on Friday and avoid default.

But the government desperately needs the next tranche of its international bailout loans to recapitalize its banks and pay civil servants and suppliers.

A senior eurozone source told Reuters on Wednesday that finance ministers of the 17-nation currency area would only attempt to close Greece's financing gap to 2014 when they meet again in Brussels next Tuesday, instead of finding a solution up to 2020 as sought by the IMF.

“We will concentrate on 2013 and 2014. The sum is about 13.5 billion euros ($17.2 billion),” said the source involved in negotiations, speaking on condition of anonymity.

That might postpone a longer-term solution to the Greek debt problem until after a September 2013 German general election, but it may not be acceptable to the IMF.

IMF Managing Director Christine Lagarde clashed publicly with the chairman of eurozone finance ministers this week, saying the global lender differed with the Europeans on how to make Greece's debt sustainable.

She insisted on Wednesday that the IMF, which put up almost a third of the money lent to Greece in two bailouts, wanted a “real fix, not a quick fix” to the issue, suggesting she will take a dim view of a shorter-term solution.

Under its standard procedures, the IMF cannot go on disbursing loans unless an adjustment program is fully funded up to the end. eurozone ministers agreed on Monday to grant Greece an extra two years, until 2016 to meet its fiscal targets, which the international lenders said would cost an extra 32 billion euros.

The dispute has called into question whether the IMF will remain in the Greek program.

But Rehn said: “The IMF has committed to support Greece according to the program, which was agreed together with the eurozone. There is no reason to suspect that the IMF would not cooperate also in the next stage of Greece's financing program.

“We know that many member countries view IMF participation, also financing, as a prerequisite for eurozone supporting Greece with these loan programs,” the EU official said. [Reuters]

ekathimerini.com , Thursday November 15, 2012 (15:55)  
New Democracy should look to center ground, says Mitsotakis
Education Ministry says almost 180,000 tertiary students ´stagnant´
Hardouvelis ready to make changes to property tax after MP talks
Ancient Amphipolis tomb unlikely to have been looted, says lead archaeologist
External factors threatening Greek recovery
At a time when the Greek economy is displaying what appear to be early signs of recovery, following six years of deep recession, a series of external factors are threatening to undermine the...
Vodafone to buy 73 pct more of Hellas Online for 73 mln euros
Britain’s Vodafone has agreed to acquire a further 73 percent stake in Greece’s broadband and fixed-line telephony provider Hellas Online for 73 million euros, to help it better compete in t...
Inside Business
West Brom sign Greek international striker Samaras
West Bromwich Albion have signed Greece striker Georgios Samaras on a two-year contract following his release from Scottish champions Celtic, the English Premier League club said on Friday. ...
SOCCER
Panathinaikos, Asteras Tripolis notch up vital wins in Europa League
Thursday proved a very productive night for two of the three Greek teams performing in the Europa League as Panathinaikos and Asteras Tripolis secured vital wins in the first legs of their p...
Inside Sports
COMMENTARY
On steroids
Bodybuilders are in a league of their own. They rarely make headlines for their achievements, their performance, or being role models. In contrast, they’re more likely to make the news due t...
EDITORIAL
Time to kick a stupid habit
Official figures indicate that tax dodging continues unabated across Greece’s tourist areas. According to data made available by the Finance Ministry following checks conducted between July ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. New Democracy should look to center ground, says Mitsotakis
2. Education Ministry says almost 180,000 tertiary students ´stagnant´
3. Hardouvelis ready to make changes to property tax after MP talks
4. Ancient Amphipolis tomb unlikely to have been looted, says lead archaeologist
5. Anti-terrorism squad called in after 300,000-euro bank robbery
6. External factors threatening Greek recovery
more news
Today
This Week
1. Aftershocks rattle Halkidiki after strong 5-Richter quake
2. Coast guard intercepts 180 migrants in Aegean in two days
3. Greek peach farmers await Brussels decision on compensation
4. Avramopoulos, Hagel hammer out 'roadmap' of defense cooperation
5. Hardouvelis hears grievances of coalition MPS to unified property tax bill
6. Spanish government bonds rise with Italy's before Draghi speech
Today
This Week
1. Carved sphinxes at Ancient Amphipolis tomb will not be removed
2. The magical mountain
3. Merkel cites euro’s ‘construction flaws’ as economy sputters
4. Greek stock recovery fading away as ASE falls 21 pct on valuations
5. Brussels warns Greece over plans to allow construction near Korinos beach
6. Second man held over double murder in Mani
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.