Digging deeper
June 4, 2011
A four-week inspection of Greek finances by the European Union and the International Monetary Fund has ended "positively," the Finance Ministry said Friday, as the EU and IMF confirmed Greece would receive the next installment of financial aid to help with its debt woes by July.
The ministry said the two sides had discussed a four-year program to reduce the Greek public deficit and its debt of some 350 billion euros ($504 billion) through further reform and privatization measures.
Greece needed its reforms approved to unlock the next 12-billion-euro loan installment of its EU and the IMF loan. Inspectors from the two groups, as well as from the European Central Bank, said Friday that Greece's implementation of the bailout plan was satisfactory and that considerable progress had been made toward repairing the country's finances.
"Once this process is concluded and following approval of the IMF's Executive Board and the Eurogroup, the next tranche will become available, most likely in early July," the inspectors said.
Earlier in the day, protesters from Greece's communist-leaning PAME party draped a five-storey banner from the roof of the finance ministry in Athens calling for public sector strikes. Unions have vowed to strike against austerity measures.
'There will be no default'
The announcements from Athens came as Greek Prime Minister George Papandreou held talks with the eurozone's head policymaker Jean-Claude Juncker in Luxembourg to negotiate an additional loan package to cover beyond 2013, when the original bailout expires.
After the talks, Papandreou said he had also asked that EU partners help Greece manage its financial woes.
"These are things which I'm very glad that they are ready to help [with] and provide the necessary people, technical knowledge, expertise," Papandreou said.
He added that despite "big sacrifices by the Greek people, still much has to be done. At the same time we have seen that the markets remain sceptical and this why we are now discussing about additional financial support."
Juncker, meanwhile, said eurozone nations were likely to agree fresh aid for Greece, but "under strict conditionality."
"This conditionality includes private sector involvement on a voluntary basis, and this private sector involvement will have to be negotiated with private creditors."
He added: "On that basis, it's obvious there will not be an exit of Greece from the euro area, there will be no default and Greece will be able to fully honor its obligations."
Author: Sarah Harman, Darren Mara (dpa, Reuters, AFP)
Editor: Martin Kuebler