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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published April 24, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Greece hits the bailout button, activating 45b euro aid package
(Athens)
GREECE asked European governments and the IMF yesterday to trigger billions of euros in emergency loans in what could be the largest state bailout ever attempted.
Prime Minister George Papandreou asked for the 45 billion euro (S$82 billion) package put together by the European Union (EU) and the International Monetary Fund to be activated after months of markets pushing Greek borrowing costs ever higher, undermining the country's efforts to cut its 300 billion euro debt load.
'It is imperative that we ask for the activation of the mechanism,' Mr Papandreou said on live national television and radio from the remote Aegean island of Kastellorizo.
Greece expects to receive the first tranche of funds before May 19, Finance Minister George Papaconstantinou said yesterday. 'We expect to have funds from the mechanism before May 19,' Mr Papaconstantinou told reporters.
European markets rallied on the announcement but investors quickly concluded that the long-awaited bailout would only provide a short-term solution to the Greek debt crisis. After bouncing initially, the euro slipped to 1.3305. But the premium investors demand to buy Greek 10-year government bonds rather than eurozone benchmark Bunds tightened to 530 basis points versus 611 basis point at its peak on Thursday.
IMF chief Dominique Strauss-Kahn said yesterday the group was preparing 'to move expeditiously' on Greece's bailout after Athens appealed to the fund and EU for up to 45 billion euros in urgent aid.
'We are prepared to move expeditiously on this request,' Mr Strauss-Kahn said in a statement released by the IMF. 'We have been working closely with the Greek authorities for some weeks on technical assistance, and have had a mission on the ground in Athens for a few days working with the authorities and the European Union,' he said.
But German Chancellor Angela Merkel stressed that aid to Greece was not automatic and depended on Athens producing a credible savings plan and proof that eurozone stability was on the line. 'The stability of our currency is the first priority,' she said. 'The savings plans absolutely have to be credible,' Ms Merkel added.
Time is pressing, with Greece needing assistance before it has to redeem an 8.5 billion euro bond on May 19.
Eurozone officials said it could take a week for the European Commission and the European Central Bank to decide if the request was valid and for eurozone finance ministers then to take a formal decision. 'There are no deadlines,' Commission spokesman Amadeu Altafaj told a regular news briefing.
Some investors had expressed exasperation with the socialist government which, caught between punishing market forces abroad and Greek workers fearful of painful austerity measures, was hesitant to ask for help.
Greek bond yields hit 12-year highs on Thursday as doubts about its ability to avoid default intensified when European Commission data showed its large public deficit was even worse than feared and Moody's Investors Service downgraded its rating of Greek government debt.
The budget figures were announced as tens of thousands of Greek nurses, teachers and other public workers staged a one-day strike against the government's austerity measures.
Athens still faces some opposition in Germany, where a majority of voters are against helping the long-time budget offending country against the backdrop of a key state election on May 9.
In the run-up to the vote, German political parties have expressed resistance to approving the aid in a required parliamentary vote, but senior officials said yesterday it should not jeopardise the rescue package.
'Because Greece would not need all the aid immediately, the International Monetary Fund could supply the first tranche if necessary,' a member of the ruling coalition said, speaking on condition of anonymity. 'Then European governments could step in depending on how quickly they can approve aid nationally.' -- Reuters, AFP
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Greece hits the bailout button, activating 45b euro aid package
(Athens)
GREECE asked European governments and the IMF yesterday to trigger billions of euros in emergency loans in what could be the largest state bailout ever attempted.
Prime Minister George Papandreou asked for the 45 billion euro (S$82 billion) package put together by the European Union (EU) and the International Monetary Fund to be activated after months of markets pushing Greek borrowing costs ever higher, undermining the country's efforts to cut its 300 billion euro debt load.
'It is imperative that we ask for the activation of the mechanism,' Mr Papandreou said on live national television and radio from the remote Aegean island of Kastellorizo.
Greece expects to receive the first tranche of funds before May 19, Finance Minister George Papaconstantinou said yesterday. 'We expect to have funds from the mechanism before May 19,' Mr Papaconstantinou told reporters.
European markets rallied on the announcement but investors quickly concluded that the long-awaited bailout would only provide a short-term solution to the Greek debt crisis. After bouncing initially, the euro slipped to 1.3305. But the premium investors demand to buy Greek 10-year government bonds rather than eurozone benchmark Bunds tightened to 530 basis points versus 611 basis point at its peak on Thursday.
IMF chief Dominique Strauss-Kahn said yesterday the group was preparing 'to move expeditiously' on Greece's bailout after Athens appealed to the fund and EU for up to 45 billion euros in urgent aid.
'We are prepared to move expeditiously on this request,' Mr Strauss-Kahn said in a statement released by the IMF. 'We have been working closely with the Greek authorities for some weeks on technical assistance, and have had a mission on the ground in Athens for a few days working with the authorities and the European Union,' he said.
But German Chancellor Angela Merkel stressed that aid to Greece was not automatic and depended on Athens producing a credible savings plan and proof that eurozone stability was on the line. 'The stability of our currency is the first priority,' she said. 'The savings plans absolutely have to be credible,' Ms Merkel added.
Time is pressing, with Greece needing assistance before it has to redeem an 8.5 billion euro bond on May 19.
Eurozone officials said it could take a week for the European Commission and the European Central Bank to decide if the request was valid and for eurozone finance ministers then to take a formal decision. 'There are no deadlines,' Commission spokesman Amadeu Altafaj told a regular news briefing.
Some investors had expressed exasperation with the socialist government which, caught between punishing market forces abroad and Greek workers fearful of painful austerity measures, was hesitant to ask for help.
Greek bond yields hit 12-year highs on Thursday as doubts about its ability to avoid default intensified when European Commission data showed its large public deficit was even worse than feared and Moody's Investors Service downgraded its rating of Greek government debt.
The budget figures were announced as tens of thousands of Greek nurses, teachers and other public workers staged a one-day strike against the government's austerity measures.
Athens still faces some opposition in Germany, where a majority of voters are against helping the long-time budget offending country against the backdrop of a key state election on May 9.
In the run-up to the vote, German political parties have expressed resistance to approving the aid in a required parliamentary vote, but senior officials said yesterday it should not jeopardise the rescue package.
'Because Greece would not need all the aid immediately, the International Monetary Fund could supply the first tranche if necessary,' a member of the ruling coalition said, speaking on condition of anonymity. 'Then European governments could step in depending on how quickly they can approve aid nationally.' -- Reuters, AFP
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT></TD></TR></TBODY></TABLE>
