EU resolute on support for Greece

The European Union and the eurozone in particular are determined to support Greece if the need arises and if there is such a request from Athens, reiterated Amadeu Altafaj, spokesman for Economic and Monetary Affairs Commissioner Olli Rehn, yesterday. «If Greece needs assistance and requests it, although so far it has not asked for money, then we will examine the request,» said Altafaj, suggesting that the EU inspectors who returned from their visit to Athens this week gave Rehn a full picture of the progress of Greece’s Stability and Growth Program. Rehn is due to arrive in Greece next week, possibly on Monday, and is likely to call for additional measures, if they have not already been announced by the government, so as to cover the shortfall of 3.6 to 4.8 billion euros that is expected in budget revenue due to lower-than-anticipated growth. Deutsche Bank’s CEO Josef Ackermann was in Athens yesterday and met with Prime Minister George Papandreou, the latter’s office confirmed, without any details of the talks being made known. However, government spokesman Giorgos Petalotis rejected a report that Deutsche Bank had agreed to buy 15 billion euros of Greek bonds. In Germany, meanwhile, the local edition of the Financial Times reported yesterday that certain major financial institutions in the country including Eurohypo and Hypo Real Estate have decided against buying Greek bonds in any new issue. Deutsche Postbank has also reached a similar decision, while two other important regional banks, BayernLB and LBBW are unlikely to buy Greek debt. Yesterday’s Wall Street Journal suggested that Athens had postponed a major bond issue this week until next, due to volatility in the markets. Meanwhile, Eurostat announced yesterday in Brussels that inflation in Greece slowed to 2.3 percent in January from 2.6 percent in December 2009, probably owing to the winter sales.

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