PM looks to next economic challenge

Less than 24 hours after the eurozone finalized the details of a 30-billion-euro emergency loan scheme for Greece, Prime Minister George Papandreou tried to shift attention to the economic reforms his government still has to undertake. Papandreou said he was not focusing just on the positive impact that the announcement of the package details had on Greek bond spreads. «We have to concentrate on the next steps in the economy,» he said, adding that the yields on Greek paper would not be the only indicator of whether Athens will call on the loans. Sources said the government wants to push ahead with reforms as European Commission officials are due to conduct an economic progress report next month and Greece wants to avoid any negative feedback. The new tax regulations are due to be voted into law this week. Next on the agenda are the liberalization of closed occupations and pension reforms. Papandreou and his ministers are also due to discuss over the next few days the sell-off of public companies. Meanwhile, Greek officials were holding talks in Brussels with representatives of the European Commission, the International Monetary Fund and the European Central Bank to finalize the details of the loan scheme. One of the issues that has yet to be clarified is who will actually decide to put the scheme into operation, as it has been suggested that either the leaders of the eurozone countries would take the decision or that it would be left to their finance ministers. Also the exact financial contribution of the IMF has yet to be determined. It is thought that the Washington-based fund will contribute 10 to 15 billion euros on top of the eurozone’s 30 billion. IMF managing director Dominique Strauss-Kahn suggested that deflation is the only way for Greece to tackle its debt problem.

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