http://ekathimerini.com/4dcgi/_w_articles_wsite1_9136_31/01/2012_425158
European Council rejects German idea of Commissioner to oversee Greek budget
Prime Minister Lucas Papademos said after lengthy talks in Brussels that Greece hopes to conclude negotiations with troika officials in Athens by the end of the week, although he admitted that there were still some “difficult issues” to resolve.
Speaking to journalists early on Tuesday morning after holding a second round of talks with European Unions officials once the leaders’ summit had concluded, Papademos refused to be drawn on the difficulties in the ongoing talks with the troika over a second bailout but hinted that labor costs were one of the issues still to be resolved.
“We aim to conclude talks with the troika by the end of the week,” he said
Greece’s lenders have asked for private sector wage cuts, which the political parties, unions and employers oppose. Papademos said that during the European Council meeting, he pointed out that Greece had regained over the last two years a third of the competitiveness it lost between 2000 and 2009 against other EU members. The prime minister said more steps were needed.
He added that there had been “significant parameters on the basic economic parameters” of the debt restructuring, or PSI, it is negotiating with bondholders.
Papademos said that if Greece secures the debt reduction and next bailout, this should be the last time it requires assistance from its partners.
“Our aim is to be in a position where we will not need any more funding from our lenders,” he said.
In her press conference, German Chancellor Angela Merkel had expressed concern about Greece’s debt sustainability and whether the haircut being negotiated with bondholders would be enough to rectify the problem.
“Greece’s debt sustainability is especially bad,” Merkel told reporters after the summit. “You have to find a way through more action by the Greek government, more contributions by private creditors, for example, in order to close this gap.”
PM aiming to conclude troika talks this week
European Council rejects German idea of Commissioner to oversee Greek budget
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Speaking to journalists early on Tuesday morning after holding a second round of talks with European Unions officials once the leaders’ summit had concluded, Papademos refused to be drawn on the difficulties in the ongoing talks with the troika over a second bailout but hinted that labor costs were one of the issues still to be resolved.
“We aim to conclude talks with the troika by the end of the week,” he said
Greece’s lenders have asked for private sector wage cuts, which the political parties, unions and employers oppose. Papademos said that during the European Council meeting, he pointed out that Greece had regained over the last two years a third of the competitiveness it lost between 2000 and 2009 against other EU members. The prime minister said more steps were needed.
He added that there had been “significant parameters on the basic economic parameters” of the debt restructuring, or PSI, it is negotiating with bondholders.
Papademos said that if Greece secures the debt reduction and next bailout, this should be the last time it requires assistance from its partners.
“Our aim is to be in a position where we will not need any more funding from our lenders,” he said.
In her press conference, German Chancellor Angela Merkel had expressed concern about Greece’s debt sustainability and whether the haircut being negotiated with bondholders would be enough to rectify the problem.
“Greece’s debt sustainability is especially bad,” Merkel told reporters after the summit. “You have to find a way through more action by the Greek government, more contributions by private creditors, for example, in order to close this gap.”
The Greek prime minister said that in its conclusions, the European Council had asked for the “irrevocable” commitment of Greece’s political parties to the reform program. It was not clear if this would entail party leaders providing written commitment.
Papademos, however, expressed confidence about receiving the necessary support for the measures in Parliament.
After the EU council, Papademos met with Joerg Asmussen, an ECB executive board member, who has publicly opposed the ECB taking part in the private sector writedown of Greece's debt holdings.
Also at the meeting were Eurogroup Chairman Jean-Claude Juncker, EU Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso, the European commissioner for economic and monetary affairs, Olli Rehn, and Greek Finance Minister Evangelos Venizelos.
Van Rompuy told reporters after the summit that the aim was to finalize a deal on a second package of support for Greece by the end of the week, so that all details are agreed by mid-February. Eurozone finance ministers next meet on February 12-13.
Papademos added in his press conference that there had been no discussion about German proposals for the EU to appoint a commissioner to oversee Greece’s budget with powers to intervene in fiscal policy.
Merkel also played down the German proposal. «Such supervision is only necessary if it is determined that a country does not stick to its agreements. That has not been the case with Portugal or with Ireland. But it is the case with Greece and that is why the need for such supervision arose. And so Greece is a special case,» said Merkel.
French President Nicolas Sarkozy indicated that the idea was a non-starter. He said that «step-by-step oversight is normal» but that appointing a commissioner with powers to interfere in Greece’s budget was not a possibility.
"Greece's recovery plan can be implemented only by the Greeks,» Sarkozy said. «No country can possibly be placed in guardianship. It would not be reasonable, democratic and efficient."
Sarkozy said Merkel had not backed the proposal.
Italian Prime Minister Mario Monti said that the idea of appointing a commissioner to oversee the Greek budget was not on the agenda during the EU leaders’ summit.
'I personally found the suggestion ... far fetched and unpleasant, but it certainly was not mentioned to heads of state and government,' said Monti.
The French President added that he expected Greece to conclude its debt restructuring negotiations with private bondholders very soon.
Papademos, however, expressed confidence about receiving the necessary support for the measures in Parliament.
After the EU council, Papademos met with Joerg Asmussen, an ECB executive board member, who has publicly opposed the ECB taking part in the private sector writedown of Greece's debt holdings.
Also at the meeting were Eurogroup Chairman Jean-Claude Juncker, EU Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso, the European commissioner for economic and monetary affairs, Olli Rehn, and Greek Finance Minister Evangelos Venizelos.
Van Rompuy told reporters after the summit that the aim was to finalize a deal on a second package of support for Greece by the end of the week, so that all details are agreed by mid-February. Eurozone finance ministers next meet on February 12-13.
Papademos added in his press conference that there had been no discussion about German proposals for the EU to appoint a commissioner to oversee Greece’s budget with powers to intervene in fiscal policy.
Merkel also played down the German proposal. «Such supervision is only necessary if it is determined that a country does not stick to its agreements. That has not been the case with Portugal or with Ireland. But it is the case with Greece and that is why the need for such supervision arose. And so Greece is a special case,» said Merkel.
French President Nicolas Sarkozy indicated that the idea was a non-starter. He said that «step-by-step oversight is normal» but that appointing a commissioner with powers to interfere in Greece’s budget was not a possibility.
"Greece's recovery plan can be implemented only by the Greeks,» Sarkozy said. «No country can possibly be placed in guardianship. It would not be reasonable, democratic and efficient."
Sarkozy said Merkel had not backed the proposal.
Italian Prime Minister Mario Monti said that the idea of appointing a commissioner to oversee the Greek budget was not on the agenda during the EU leaders’ summit.
'I personally found the suggestion ... far fetched and unpleasant, but it certainly was not mentioned to heads of state and government,' said Monti.
The French President added that he expected Greece to conclude its debt restructuring negotiations with private bondholders very soon.
| "The negotiations are moving forward in a good direction and we have high hopes that there will be an agreement in the coming days,» said Sarkozy. "The problem of the negotiation in Greece is a problem between the private sector, perhaps other European institutions, and Greece,» he added. Sarkozy added that leaders had «not taken a decision» on whether a special eurozone summit would be held to discuss issues relating just to Greece. |
http://ekathimerini.com/4dcgi/_w_articles_wsite1_1_30/01/2012_425152
ReplyDeleteParties ready to debate some measures
Even as they set down their limits, leaders of the country’s tripartite coalition government have indicated that they are ready to negotiate, to a certain degree, with Greece’s foreign creditors.
Antonis Samaras, the leader of conservative New Democracy, which is leading in opinion polls, is reportedly prepared to accept demands by creditors that new bonds -- in a debt swap still being negotiated between government officials and private firms -- be subject to British rather than Greek law. The decision is expected to rile several ND cadres who have spoken out against such a prospect. But some support the idea. On Monday, Theodoros Vardas, an adviser to Samaras, backed the recapitalization of banks that would not result in the government getting shares with voting rights.
However ND’s leadership strongly opposes other changes proposed by foreign creditors including cuts to auxiliary pensions and to wages in the private sector which, Samaras argues, would deepen the current recession. Instead the ND leader proposes a salary freeze.
The leader of the rightwing Popular Orthodox Rally (LAOS), Giorgos Karatzaferis, has reportedly proposed a different alternative to the abolition of the 13th and 14th annual salaries -- that an additional hour be added to each working day.
Former Prime Minister and Socialist PASOK leader George Papandreou struck a different tone on Monday. Addressing fellow members of the European Socialist Party at a congress in Brussels, Papandreou appealed for tolerance and patience with Greece’s reform efforts, noting that most countries need a decade to push through the changes that Greek authorities have been grappling with since 2010. He added that pure austerity has been proven not to work and should not be imposed on other EU member states.
http://ekathimerini.com/4dcgi/_w_articles_wsite2_22982_30/01/2012_425146
ReplyDeleteThe ambitious plan of merging two of Greece’s three biggest lenders, Alpha Bank and Eurobank EFG, may be suspended after all, if indications are anything to go by.
Alpha Bank on Monday referred to a disproportionate impact on the two banks from the implementation of the debt swap plan (PSI+) stressing that it was expecting the completion of PSI talks so as to call a general meeting and reach a decision on the issue.
In a bourse filing the bank referred to the uncertainty over the PSI terms cited in the November 15 board decision that had approved the merger, which led the board to make its decision based on the original debt swap plan, from last July.
On the other hand Eurobank announced that “all necessary permits have been collected and all that remains is the formal stage of the signing of the deed.” It countered that the new PSI terms, as agreed at the October eurozone summit, were already known when the November 15 board meetings took place, and the final impact of PSI was not set as a condition or reservation for the completion of the merger. Eurobank added that the merger would create significant benefits for the Greek economy.
Analysts suggest that in the last few weeks there have been some behind-the-scenes problems in the completion of the merger process as the considerable expansion of the haircut in the context of the private sector involvement changed the balance agreed when the merger was announced in August.
Given the bad conditions in the markets there are considerable worries as to whether the deal can now be completed. The capitalization of the two lenders is in historic lows and the sale of their assets will be particularly difficult.
The Finance Ministry issued a statement late on Monday expressing the government’s displeasure with the course of the deal, underscoring that developments on PSI had been known.
Still, there are some analysts who argue that the two banks could examine the new conditions and proceed to the necessary adjustments that would see the merger take place after all.