ECONOMY

Solutions in broader package

Greece will be offered more time to repay its European Union-International Monetary Fund loan as part of a «larger package» being put together by Brussels to help weaker member states, Finance Minister Giorgos Papaconstantinou told a Cabinet meeting yesterday. At the same time, the minister said that in coming days the government will have to decide on a package of additional measures worth 11 billion euros for the 2012-2014 period. This will have to be decided while representatives from Greece’s lenders, known as the troika, are in town, added the minister. Troika officials are scheduled to arrive in Athens on January 27. According to sources, the minister said that among the options being considered by Brussels is boosting the size of the European Financial Stability Facility (EFSF), providing Greece with extra time to repay its 110-billion-euro loan and reducing the interest rate paid on the rescue funds. It is considered a given that Greece will follow Ireland’s program regarding the repayment period and interest rate. There is speculation that the cost of the funds will drop to 3 to 4 percent from around 5 percent currently. Final decisions on the loan period and the EFSF will be decided at the next EU summit or eurogroup meeting, both of which are scheduled to take place in February. Papaconstantinou also described the calm conditions prevailing on the debt markets as temporary, adding that they are due to the intervention from the European Central Bank, which cannot last forever. Ratings agency Fitch warned yesterday that it may further reduce its rating on Greek, Irish and Portuguese banks. Meanwhile, data released from the Finance Ministry yesterday showed that Greece’s central budget deficit shrank 37 percent last year, beating a target to reduce the shortfall by 33 percent. The 2010 deficit was reduced to 19.5 billion euros, from 30.9 billion euros in 2009, the ministry said, broadly confirming preliminary data released earlier this month. Ordinary budget expenditure declined 9.1 percent to 65.2 billion euros from 71.8 billion euros in 2009, with primary expenditure decreasing 10.9 percent to 51.7 billion euros. Ordinary revenue increased to 51.2 billion euros from 48.4 billion euros in 2009, a 5.5 percent increase.