ENGLISH

FinMin: Greece aims to return to markets in 2011

Δημοσίευση 1 Δεκεμβρίου 2010, 10:22 / Ανανεώθηκε 27 Ιουνίου 2013, 14:55
FinMin: Greece aims to return to markets in 2011
Facebook Twitter Whatsapp

A decision taken by the Eurogroup on Sunday to examine the possibility of extending the loan repayment period for Greece is a "very significant addition, paving the way for an earlier opening of markets", Greek Finance Minister George Papaconstantinou said on Monday.

A decision taken by the Eurogroup on Sunday to examine the possibility of extending the loan repayment period for Greece is a "very significant addition, paving the way for an earlier opening of markets", Greek Finance Minister George Papaconstantinou said on Monday.

Speaking to reporters, the Greek minister stressed that the Memorandum signed between Greece and the troika of EU/ECB/IMF ends in 2013, while the period for repaying the loan was extended to 2024, and added: "We hope that the extension will cover the next loan tranche scheduled for March 2011, worth 15 billion euros".

He clarified that "it is obvious that following the termination of the Memorandum, the country will remain within a new more austere framework of the European Union, which focuses on creating primary surpluses and setting a debt criterion".

He noted that keeping the fiscal deficit below 3.0 pct of GDP and creating annual primary surpluses on a permanent basis "will allow the distribution of a social dividend to the most vulnerable groups of the population, which have contributed the most to the fiscal consolidation effort"

According to a timetable set by the Eurogroup, a decision to extend the loan repayment period for Greece was a technical issue to be resolved in the first two months of 2011. Some of the technical matters are whether the extension decision will cover the entire 110-bln-euro loan or the remaining tranches of the loan. Certain Eurogroup countries (such as Germany) will have to ratify the extension agreement through their parliaments, while the interest on the Greek loan would have to raised to 5.8 pct (as in the case of Ireland) from around 4.0 pct (fluctuating) or 5.5 pct (fixed) currently. Following the termination of the memorandum in 2013 the country will remain within the European Commission’s framework, while the IMF will publish reports periodically, and the troika will not exist as it is today, Papaconstantinou said, adding that Greece has never asked for an extension of its loan repayment period.

The Greek minister clarified that European parliaments will approve the plan in January-February and noted that this development "makes it more necessary to strictly adhere to the terms of the memorandum". He said the government’s goals remained a return to capital markets in 2011, as such a move would open markets for Greek banks as well as boosting liquidity in the economy.

Papaconstantinou also said a decision on a permanent European support mechanism (to be approved by an EU Summit in December) was a compromise, one which delicately defines any participation of private investors in the mechanism, while it clearly defines countries with "liquidity problems" and countries with "survival problems".

Commenting on the European Commission’s autumn economic forecasts, Papaconstantinou said they were in line with budget provisions.

Speaking hours later at the annual conference in Athens of the Hellenic-American Chamber of Commerce, Papaconstantinou said deliberations amongst international market leaders centred on the fact that Greece must tame its public debt, while at the same time jumpstarting growth.

He added, along these lines, that a prerequisite for growth is funding.