ECONOMY

Greece not seeking EU bailout

Finance Minister Giorgos Papaconstantinou said yesterday there are no discussions being held with Greece’s EU partners over a possible bailout of the country. Papaconstantinou, who was in Berlin and Paris yesterday, is meeting with EU peers and investors in a bid to show that the country is taking the steps needed to address its fiscal problems. «There is no question of a bailout,» Papaconstantinou said in Paris. We’re not talking about that» with European partners. «Greece will do what is necessary to reduce its deficit,» he said. Prime Minister George Papandreou late on Monday announced spending cuts and a 90 percent tax on private bankers’ bonuses in an effort to rein in Greece’s debt and deficit. But investors showed they were expecting more from the Greek prime minister, sending Greek bonds lower for a second straight day. The decline pushed the yield premium for holding 10-year Greek bonds as opposed to German Bunds to the highest in eight months. The yield on the 10-year Greek note rose 28 basis points to 5.75 percent, after earlier reaching 5.76 percent, the highest since early April. «There was too little new from Papandreou,» David Keeble, head of fixed-income strategy in London at Calyon, the investment-banking unit of Credit Agricole, told Bloomberg. «It looks like they have an unchanged budget deficit forecast for 2010. It’s disappointing.» Credit-default swaps on Greek government debt rose 17 basis points to 237, according to CMA DataVision, the highest since March. The swaps protect the owners of bonds in the case of a default and an increase signals a deterioration in perceptions of credit quality. Meanwhile, the European Commission described Papandreou’s announcements as being «in the right direction» and said it expects Greece to spell out in January concrete measures for rapid consolidation of its public finances next year.