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EU Rehn: Voluntary Extension Of Greek Debt Maturities Possible
PARIS (MNI) - A "voluntary" extension of maturities on Greece's sovereign debt might be considered once Athens has committed to new measures that are urgently needed in order to meet the fiscal targets tied to its E110 billion EMU-IMF aid package, Europe's Economic and Monetary Affairs Commissioner Olli Rehn said Tuesday.
Speaking at a press conference following a day of meetings among the European Union's 27 finance ministers, Rehn said Greece must take new measures "immediately" to comply with its deficit target for this year, after last year's deficit was revised sharply higher, missing the target.
Once the new measures are taken, Rehn added, Eurozone finance ministers will also consider the possibility of additional aid for Greece.
It is an increasingly open secret among European officials that Greece will not regain access to capital markets next year, as originally hoped, and will thus need additional money to meet about E30 billion worth of debt repayments coming due.
There has been talk in recent days of a new bailout package worth as much as E60 billion, though that number has not been confirmed. Eurogroup Chairman Jean-Claude Juncker, speaking at a press conference Monday evening, said it was "premature" to talk about fresh cash for Greece, "but that does not necessarily mean it is excluded."
Rehn said, "it is crucial that Greek authorities announce decisive measures to ensure that fiscal consolidation targets will be met." He added, "once these measures are taken, the Eurogroup will look into possible new steps."
Debt restructuring is "not on the table," Rehn said. If Athens implements a set of convincing measures, including a jump start to its promised privatization program, it might also then approach its private creditors and talk to them about maintaining their exposure in Greece, much like Portugal has committed to do in its E78 billion program, he added.
"In this context a voluntary extension of loan maturities could also be examined," Rehn said.
In the view of EU officials, the most burning issue with Greece right now is the large privatization program it promised to undertake, which it has not yet started. The plan is to raise E50 billion through 2015 by selling of state assets and properties, with E15 billion of that amount slated for this year and next.
The total amount of the planned privatizations through 2015 is equal to about 20% of Greece's GDP, so it is a rather significant piece of the fiscal plan. But to the frustration of its EU partners, Greece has barely started the program.
"This is a necessary condition of making progress and it really needs to start immediately," Rehn said. He denied there was a lack of cooperation by Greek officials, saying that European Commission and IMF inspectors, currently in Athens, were getting "all the information" they needed. "We expect in the coming days that Greece can announce measures that will enable it to meet its fiscal targets," he added.
"If it is possible for Portugal and Ireland, then why not in Greece?" Rehn asked, rhetorically. "It is a matter of national destiny" and of "political responsibility," he said.
Greek media organizations reported Tuesday that Athens is set to announce a new package of measures as early as Thursday.
Rehn said ministers also discussed the upcoming European bank stress tests, results of which are due to be published in June. The results should be coordinated and credible, he said. And national authorities should be prepared with the needed "back stops" to help vulnerable banks recapitalize and reorganize.
Asked about the serious legal troubles of IMF Managing Director Dominique Strauss-Kahn, said it was premature to discuss any possible successor for him. He did venture the view that the head of the IMF should be a European.
EU finance ministers also approved Bank of Italy Governor Mario Draghi to be the next ECB president, succeeding Jean-Claude Trichet after his term ends October 31. The move came after Eurozone finance ministers put their stamp of approval on Draghi Monday night.
The nomination will now go to European Parliament, then to the EU heads of state and government, who are expected to ratify it at their June 24 Summit, thus making Draghi the third president of the ECB.
(imarketnews.com)
PARIS (MNI) - A "voluntary" extension of maturities on Greece's sovereign debt might be considered once Athens has committed to new measures that are urgently needed in order to meet the fiscal targets tied to its E110 billion EMU-IMF aid package, Europe's Economic and Monetary Affairs Commissioner Olli Rehn said Tuesday.
Speaking at a press conference following a day of meetings among the European Union's 27 finance ministers, Rehn said Greece must take new measures "immediately" to comply with its deficit target for this year, after last year's deficit was revised sharply higher, missing the target.
Once the new measures are taken, Rehn added, Eurozone finance ministers will also consider the possibility of additional aid for Greece.
It is an increasingly open secret among European officials that Greece will not regain access to capital markets next year, as originally hoped, and will thus need additional money to meet about E30 billion worth of debt repayments coming due.
There has been talk in recent days of a new bailout package worth as much as E60 billion, though that number has not been confirmed. Eurogroup Chairman Jean-Claude Juncker, speaking at a press conference Monday evening, said it was "premature" to talk about fresh cash for Greece, "but that does not necessarily mean it is excluded."
Rehn said, "it is crucial that Greek authorities announce decisive measures to ensure that fiscal consolidation targets will be met." He added, "once these measures are taken, the Eurogroup will look into possible new steps."
Debt restructuring is "not on the table," Rehn said. If Athens implements a set of convincing measures, including a jump start to its promised privatization program, it might also then approach its private creditors and talk to them about maintaining their exposure in Greece, much like Portugal has committed to do in its E78 billion program, he added.
"In this context a voluntary extension of loan maturities could also be examined," Rehn said.
In the view of EU officials, the most burning issue with Greece right now is the large privatization program it promised to undertake, which it has not yet started. The plan is to raise E50 billion through 2015 by selling of state assets and properties, with E15 billion of that amount slated for this year and next.
The total amount of the planned privatizations through 2015 is equal to about 20% of Greece's GDP, so it is a rather significant piece of the fiscal plan. But to the frustration of its EU partners, Greece has barely started the program.
"This is a necessary condition of making progress and it really needs to start immediately," Rehn said. He denied there was a lack of cooperation by Greek officials, saying that European Commission and IMF inspectors, currently in Athens, were getting "all the information" they needed. "We expect in the coming days that Greece can announce measures that will enable it to meet its fiscal targets," he added.
"If it is possible for Portugal and Ireland, then why not in Greece?" Rehn asked, rhetorically. "It is a matter of national destiny" and of "political responsibility," he said.
Greek media organizations reported Tuesday that Athens is set to announce a new package of measures as early as Thursday.
Rehn said ministers also discussed the upcoming European bank stress tests, results of which are due to be published in June. The results should be coordinated and credible, he said. And national authorities should be prepared with the needed "back stops" to help vulnerable banks recapitalize and reorganize.
Asked about the serious legal troubles of IMF Managing Director Dominique Strauss-Kahn, said it was premature to discuss any possible successor for him. He did venture the view that the head of the IMF should be a European.
EU finance ministers also approved Bank of Italy Governor Mario Draghi to be the next ECB president, succeeding Jean-Claude Trichet after his term ends October 31. The move came after Eurozone finance ministers put their stamp of approval on Draghi Monday night.
The nomination will now go to European Parliament, then to the EU heads of state and government, who are expected to ratify it at their June 24 Summit, thus making Draghi the third president of the ECB.
(imarketnews.com)
