Troika team arrives in Athens

Representatives of Greece?s international creditors were scheduled to arrive in Athens late Monday as the Finance Ministry finalizes details of a new round of austerity measures after its 2010 budget deficit came to more than expected.

The delegation will be of a technical level and are set to be joined in a few days by the heads of the EU-IMF mission, according to a government official.

The delegation is expected to review Greece?s medium-term fiscal strategy and its privatization plan which aims at raising 30 billion euros by 2015.

A further visit is expected in early May to conduct a regular quarterly review of Greece’s overall progress toward its fiscal goals and decide on the country’s eligibility to receive a fifth disbursement of its loan.

The medium-term fiscal strategy is expected to aim at raising about 25 billion euros over the next four years.

Meanwhile, analysts said on Monday that a default by Greece may condemn Ireland and Portugal to the same fate, as investors dump bonds of all three nations and voters resist economic austerity measures.

?Greece will restructure in 2013, or perhaps before,? Marie-Anne Allier, the Paris-based head of the euro-aggregate group at Amundi Asset Management, Europe?s third-largest investment manager with 689.5 billion euros, told Bloomberg.

?If Greece restructures, it will be very difficult for Ireland and Portugal to impose a very strict austerity program and not restructure. It?s a domino effect.?

European Union leaders agreed on March 25 to create the European Stability Mechanism, or ESM, to draw a line under the region?s debt crisis.

The ESM, which comes into effect in mid-2013, after a temporary facility expires, will make loans to fiscally strained governments under strict conditions. When governments can?t cover their debts in full, the ESM?s loans may be paid first, before private bondholders.

?The only way to avoid defaulting is for these economies to lower their debt to more sustainable levels through a period of sustained economic growth and by running very large budget surpluses,? according to Ben May, an economist at Capital Economics in London.

Greek Finance Minister Giorgos Papaconstantinou insisted over the weekend that the government is not planning to restructure its debt following press reports that the International Monetary Fund is pressuring Greece to ease its debt burden.

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