Greek PM To Hold Call With Merkel, Sarkozy
ATHENS (Dow Jones)--Greek Prime Minister George Papandreou is scheduled to hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy Wednesday, Greek state television reports Tuesday.
The report says that the conference call will focus on developments relating to the Greek economy, but didn΄t give further details.
Fears over a Greek sovereign default rocked European financial markets Monday, knocking the euro, government bond prices and also the region΄s equity markets, with French banks--which are seen as heavily exposed to Greek debt--suffering steep declines.
Those fears were touched off by weekend comments from a German lawmaker and German media reports raising the possibility of a Greek default in the near future.
At the same time, Greece΄s government is scrambling to cut public spending and step up its lagging reform drive amid ultimatums from other euro-zone governments that further rescue money will be withheld if Athens doesn΄t deliver on promises.
This month, talks between Greece and officials from the European Commission, the International Monetary Fund and the European Central Bank--the so-called troika that assesses the country΄s eligibility for fresh aid--were suspended in a dispute over whether Greece would need to take further measures.
Without the aid, Greece says it will run out of cash by the middle of October. To appease its international creditors, Greece Sunday announced a new property tax to cover a EUR2 billion shortfall it foresees in meeting its deficit targets this year.
A senior European Union diplomat said that the conference call among Papandreou, Merkel and Sarkozy would focus on a range of issues, including Greece΄s latest deficit cutting efforts and moves to implement a second Greek aid package agreed at a European summit this summer.
In July, EU leaders agreed to a new EUR109 billion aid program for Greece to cover its financing needs for the next several years, which also foresees private creditors participating in a bond-swap program to ease Greece΄s debt burden, known as the private sector initiative.
"The teleconference will probably be on Wednesday. It΄s still being arranged. The talk among the leaders is expected to focus on the latest measures announced by the Greek government and the implementation of the July decisions for the second Greek bailout, the progress of the PSI, etcetera," the diplomat said. "To be honest, the latest bailout plan is not proceeding as expected."