http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_13879_20/02/2012_428916
Finance Minister Evangelos Venizelos appeared upbeat ahead of a Eurogroup meeting on Monday that was expected to give the green light to a new bailout for Greece.
However, Venizelos’s positive mood was countered by Dutch Finance Minister Jan Kees De Jager who suggested that he had yet to be convinced that Greece could meet all the commitments it had made to qualify for more loans. He also proposed greater oversight for Greece’s lenders over its budget.
De Jager also said that the Netherlands would not approve the disbursement of more than 130 billion euros for Greece. It has been suggested that Athens might need more than originally planned to make its debt sustainable due to the deterioration of its economy over the last few months.
"We have to listen to Greece and the troika and then see if Greece has done enough,” the Dutch finance minister told the UK’s Channel 4 economics editor Faisal Islam going into the Eurogroup meeting.
“Each side has to assess whether Greece has done enough. It was not so last week. It was also not so the week before,” De Jager said, according to the reporter’s Twitter account.
Perhaps more controversially, De Jager suggested that the European Commission, the European Central Bank and the International Monetary Fund – known as the troika – should establish a permanent presence in Athens to oversee Greece’s fiscal decisions.
“When you look at the derailments in Greece which have happened several times now, it’s probably necessary that there is some kind of permanent presence of the troika in Athens not every three months but on a permanent basis,” De Jager said, according to Reuters.
“I am in favour of more control, more supervision … Money is the thing we can control Greece with.”
Earlier, Venizelos appeared hopeful that an agreement would be reached in Brussels, so Greece could proceed with its debt restructuring program, or PSI, as well.
Greeks hope for Eurogroup deal but Dutch raise doubts
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However, Venizelos’s positive mood was countered by Dutch Finance Minister Jan Kees De Jager who suggested that he had yet to be convinced that Greece could meet all the commitments it had made to qualify for more loans. He also proposed greater oversight for Greece’s lenders over its budget.
De Jager also said that the Netherlands would not approve the disbursement of more than 130 billion euros for Greece. It has been suggested that Athens might need more than originally planned to make its debt sustainable due to the deterioration of its economy over the last few months.
"We have to listen to Greece and the troika and then see if Greece has done enough,” the Dutch finance minister told the UK’s Channel 4 economics editor Faisal Islam going into the Eurogroup meeting.
“Each side has to assess whether Greece has done enough. It was not so last week. It was also not so the week before,” De Jager said, according to the reporter’s Twitter account.
Perhaps more controversially, De Jager suggested that the European Commission, the European Central Bank and the International Monetary Fund – known as the troika – should establish a permanent presence in Athens to oversee Greece’s fiscal decisions.
“When you look at the derailments in Greece which have happened several times now, it’s probably necessary that there is some kind of permanent presence of the troika in Athens not every three months but on a permanent basis,” De Jager said, according to Reuters.
“I am in favour of more control, more supervision … Money is the thing we can control Greece with.”
Earlier, Venizelos appeared hopeful that an agreement would be reached in Brussels, so Greece could proceed with its debt restructuring program, or PSI, as well.
| “We are here, ready to conclude today this long process on the new Greek programme, and also we are ready to initiate the official procedure on the PSI,” he said “I am optimistic, but in any case we need the clear political approval from the Eurogroup.” Venizelos was joined at the meeting by Prime Minister Lucas Papademos. Luxembourg Prime Minister Jean-Claude Juncker, who heads the Eurogroup, seemed confident that a deal would be reached. "I would like to assume that we can reach final and concluding negotiations today. The Greek side has fulfilled many preparatory efforts we had demanded. We have to conclude today, there's no more time to waste,” he said. "There are still questions as to how much the public sector can contribute and how we will handle the issue of private creditors in detail, and we will have to talk about the total volume of the second program. We can't exceed 130 billion.” IMF managing director Christine Lagarde indicated that Athens had done enough to secure the support of its eurozone partners. "Greece has obviously made significant efforts, and now we need to continue the work and that the entirety of the elements, particularly furnished by the other parties, are also put into place." and more tomorrows from the Guardian liveblog .... Here's the killer line from the troika's report into Greece (see also last post):
And another warning: the recapitalisation of Greece's banks may now need to be raised to €50bn. The previous estimate, I believe, was €40bn. Reuters has got hold of the troika's debt sustainability analysis of Greece's debts. As feared, the report finds that the baseline scenario is now that Greece's debt-to-GDP ratio will only fall to 129% by 2020, not 120% (which itself only brings Greece into line with Italy today). Worse -- should Greece's recession deepen, and structural reforms not be implemented, the ratio could still be at 160% in eight year's time. The troika goes on to suggest ways that the European Central Bank, and others, could bring Greek debt down to the 120% target. They are: • Restructuring accrued interest on Greek bonds. That would cut the ratio by 1.5 percentage points. • A lower interest rate on existing bilateral loans. Cutting another 1.5 percentage points of the debt/GDP ratio • Restructuring the Greek bond portfolios of the various eurozone central banks. That could cut the debt/GDP ratio by 3.5 percentage points. • The ECB could give up "profits" on its Greek bonds. That could save 5.5 percentage points. |
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