Greece examines prospect of debt restructuring after 2013: report
English.news.cn 2010-12-23 21:03:32
ATHENS, Dec. 23 (Xinhua) -- Greece is examining the possibility of restructuring its debt after 2013 without a "haircut" on the value of the Greek bonds, a Greek newspaper said Thursday.
Quoting government sources, "Ta Nea" daily said a governmental financial team has already unofficially submitted a plan to the European Commission, the European Central Bank and Berlin for deliberations.
The plan rejects any form of restructuring the Greek debt before 2014. Greece will be financially supported by the safety mechanism activated by the European Union (EU) and the International Monetary Fund (IMF) in May with 110 billion euros (144.4 billion U.S. dollars) over the next three years.
The newspaper said the Greek government proposes the extension of the repayment period for its loans from the IMF and its European partners, as well as loans from other lenders.
Furthermore, the plan seems to include a decrease on the interest rates of these loans.
Officials in Brussels appear positive to the idea, but the fundamental perquisite for such a plan is the Greek economy will be able to register positive figures in 2013.
Greek and foreign experts warn
this will be achieved only through the full and fast implementation of a stability and growth program by Greek to fix the decades-long problems of the Greek economy and drastically slash the budget deficit.
Cioè magari va anche inteso come il best-case scenario, perchè se poi non c'è neanche "growth" magari ci mettono sopra pure un haircut ? 
Currently, the deficit stands at 9.4 percent of the gross domestic product (GDP). The target is to lower it below 3 percent, within the EU threshold, in 2014.
Early Thursday, the Greek parliament approved the 2011 national austerity budget to tackle the country's serious debt crisis.
The 2011 budget is one more step towards that direction, Greek Prime Minister George Papandreou said.
The budget, which introduces further austerity policies, passed with 156 votes in favor and 142 against in the 300-member strong parliament.
All deputies of the ruling socialist PASOK party supported the bill, despite criticism from some deputies on some policies. The opposition parties rejected the bill.
Addressing the parliament, Papandreou expressed once more the determination of the government to achieve the goal of leading Greece out of the debt crisis, stressing "eventually doomsayers who predict a Greek default will be proved wrong."
Noting the painful measures are now behind, the Greek prime minister said the priority in 2011 is structural reforms to restart economic development.
Local analysts say that under the pressure of unionists with their continued strikes and protests over the austerity policies, the government will delay until early 2011 the implementation of the restructuring of loss-making state companies, such as those in the railway sector, and the liberalization of "closed" professions, such as pharmacists and architects.
The government tries to avoid further social unrest and negative impacts on Greek economy, analysts say, adding Papandreou and his finance advisors reject the idea of restructuring the Greek debt in 2011 or 2012 for this same reason.
According "Ta Nea" daily, Greek officials believe imminent restructuring would deteriorate the standing of Greek banks and debt-ridden social security funds.
Amidst negative atmosphere, funds would not be able to pay pensioners and in that case the Greek government would have to step in and release funds, creating a new budget deficit.
Greek officials opt for delaying the restructuring to 2014 for one more reason, the report said.
On Jan. 1, 2011, the newly-created permanent support mechanism of the EU will be in force.
Since the new mechanism includes a framework of European rules for restructuring,
Greece or any other country in need won't be alone in negotiations with lenders in the future, but will be supported in a way by the rest of its European partners.
E i lenders saremmo noi....
(Xinxua.com)
