NEWS

Papandrou cancels US trip due to ‘critical’ situation

Greek Prime Minister George Papandreou unexpectedly canceled a planned visit to the U.S. at the last minute, saying he needed to remain in the country for a ?critical? seven days.

?As the coming week is particularly critical for the implementation of the July 21 decisions in the euro area and the initiatives which the country must undertake, Prime Minister George A. Papandreou decided to cancel his scheduled visit to the U.S.,? according to an e-mailed statement today from his office in Athens. No further details were given.

Greece?s government is rushing to meet demands from international and European Union partners that will allow the release of a sixth tranche of loans to prevent default. The government on Sept. 11 announced a levy on properties to help raise 2 billion euros ($2.8 billion) in a bid to show it?s serious about plugging a swelling budget deficit, key to getting a second financing package agreed by EU leaders on July 21.

EU and the International Monetary Fund inspectors will meet with Finance Minister Evangelos Venizelos to resume and accelerate their review on Sept. 19, the Athens-based ministry said yesterday. Venizelos said today that putting the July 21 accord in place was the priority for the country.

?Our problem is to ensure that we get the sixth payment and each future payment with the best possible terms as we can?t keep having a repeat of the same scenario,? Venizelos told reporters in Wroclaw, Poland after a meeting with European counterparts, according to an e-mailed statement today from the Finance Ministry.

Papandreou had planned to meet officials including International Monetary Fund Managing Director Christine Lagarde and U.S. Treasury Secretary Timothy F. Geithner on his trip to New York and Washington. His first meeting was scheduled to have occurred in New York tomorrow morning.

Papandreou earlier this week promised a ?decisive battle? for budget cuts to persuade European governments and the IMF to release the 8 billion-euro loan installment later this month.

Greece has the cash reserves to cover its needs for October, Deputy Finance Minister Filippos Sachinidis said on Sept. 12

Higher taxes and cuts in wages and pensions in return for a 110 billion-euro May 2010 package of loans from the EU and IMF have weighed on the Papandreou government?s standing with Greeks, with his Pasok party now trailing the main opposition in opinion polls. EU partners have said the sixth loan, of 8 billion euros, won?t be paid if they aren?t convinced Greece is doing enough to curb a budget gap that soared to 15.4 percent in 2009.

[Bloomberg]