No thoughts of tampering with deal

The Finance Ministry moved to quash talk yesterday that it wants to change the terms of a joint EU-IMF safety net recently offered to the country but not before Greek assets took a battering on weakening sentiment about whether Greece will get through the fiscal crisis. Finance Minister Giorgos Papaconstantinou denied a press report from news agency Market News International that cited an unidentified senior Greek government source as saying that Athens wants to renegotiate a deal struck at a EU summit last month in order to sidestep painful IMF measures. The report added to uncertainty over what may happen if Athens gets into trouble borrowing on capital markets, prompting the premium investors demand to hold 10-year year securities to rise to the highest point since 1998, according to Bloomberg. The yield premium, or spread, between Greek and German 10-year bonds widened to as much as 404 basis points, the most since before the euro’s introduction. Concerns over the impact the crisis may have on Greek lenders spilled over onto the Athens bourse, which fell 2.21 percent on bank-led losses. The euro also came under pressure, dropping 0.9 percent to $1.3370 in early trade in New York. Papaconstantinou said «that there were never any steps on behalf of the country to change the terms of the support mechanism,» adding that the agreement remains important for Greece and Europe. The deal, reached in Brussels on March 25, provides Greece with bilateral loans from eurozone countries and the IMF to avoid default if it can’t borrow on capital markets. Critics have described the agreement as being unclear, especially in regards to when the support mechanism would be activated, keeping uncertainty and Greek funding costs high. Despite the show of support from government officials for the deal, senior business and political leaders have indicated that the unpopular Washington-based International Monetary Fund could act as a red flag to social groups and prompt social unrest. Meanwhile, a team of IMF officials are expected to meet up with Papaconstantinou in Athens today to discuss «technical matters» according to the Finance Ministry, including ways to better monitor the budget and catch tax cheats. [email protected]

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.