Tags: Greece Financial Crisis

Greece Seeking Better Rates on Rescue Loans

Thursday, 20 Jan 2011 07:11 AM

Greece was in talks with other European countries in an effort to lower interest rates on a rescue loan package worth a total 110 billion euros ($146 billion), the finance minister said Wednesday.

Greece has already received support from countries using the euro and the International Monetary Fund for its effort to extend the repayment of the rescue loans. A final deal has yet to be worked out.

"A discussion has begun on the cost of the loans and that is very important for us, so that we can have lower interest rates," George Papaconstantinou told private Mega television.

"It is clear why they insisted on the interest rate that they did, at the time it was imposed, because of the problems we had with our credibility," he said. "But as we regain credibility and others, like Ireland, seek support, we can negotiate the terms of getting better treatment."

Papaconstantinou again flatly denied that Greece was contemplating restructuring its debt — echoing similar remarks made earlier Wednesday by German officials.

Germany's Finance Ministry said that it "roundly rebuts" a report Wednesday in the weekly Die Zeit newspaper that there were plans in the Berlin government for a restructuring that would allow Greece to buy back its bonds, possibly with credit from Europe's bailout fund.

A Finance Ministry statement said that discussion of a strategy to stabilize the euro zone is "inside the framework of action" set out by a European Union summit last month — and that doesn't include plans to restructure Greek bonds.

Greece, despite continued recession, plans to slash a further 5 billion euros ($6.75 billion) off its budget deficit this year, lowering the shortfall to 7.4 percent of gross domestic product.

The measures are part of an unpopular austerity program that Greece signed up to last year in order to receive the rescue loads and avoid bankruptcy.

But despite fiscal improvements, the national debt is set to top 150 percent of GDP in 2011, adding pressure on the Socialist government which is facing a renewed wave of strikes as it tries to push through longer-term reforms.

Pharmacists and lawyers started a three-day strike, angry as proposed market changes that will end decades of strict regulation on their professions.

State rail employees also launched a two-day strike that canceled all train services. They oppose government plans to streamline the loss-making company through personnel transfers, pay cuts and privatizations.

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Greece was in talks with other European countries in an effort to lower interest rates on a rescue loan package worth a total 110 billion euros ($146 billion), the finance minister said Wednesday.Greece has already received support from countries using the euro and the...
Greece Financial Crisis
398
2011-11-20
Thursday, 20 Jan 2011 07:11 AM
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