Germany Dep FinMin:Worst Case Greece Cld Seek Priv Sec Relief
BRUSSELS (MNI) - Fiscally troubled Greece could have to seek relief from its private sector investors if the country is unable to emerge from its travails by dint of government reform measures and the financial aid it has been granted so far, German Deputy Finance Minister Joerg Asmussen said Tuesday.
Speaking to the press after the Eurogroup and Ecofin meetings here, Asmussen said that all finance ministers in the meetings had pressed Athens to undertake further efforts, in particular to expedite privatization and to ensure it will would meet this year's fiscal targets.
Asmussen's boss, Finance Minister Wolfgang Schaeuble, attended the gathering but could not brief media owing to another engagement.
Asmussen confirmed that the Eurogroup had "unanimously agreed to propose [Bank of Italy Governor] Mario Draghi to the European Council as successor to [current ECB President] Jean-Claude Trichet."
"I assume the Ecofin" will also express its support of Draghi, he said, adding that "Germany supported Draghi because his conception of a stability-oriented monetary policy is very close to ours."
The current mission to Athens of the so-called troika, consisting of the IMF, the EU Commission and the ECB, will presumably last a week longer than planned, Asmussen reported.
"But it can be seen already on the basis of the interim report that Greece has to undertake further efforts to fulfill the program," he said. In particular, such efforts need to focus on meeting the fiscal goals for the current year and pushing forward with the privatization plans."
"The question is how can one accelerate this privatization," in part to gain credibility, but also simply to obtain further needed revenues, Asmussen said.
If it emerges that yet more is needed from Greece, then "it lies above all with the Greek authorities" to determine how to do what is necessary, he said.
Should this prove insufficient, then the private sector could be asked to provide some relief for Greece "on a voluntary basis," he said, declining to be specific.
"All the ministers pressed Greece to take additional steps," he said. "Without any argument," what the Greeks are seeking to accomplish is "not easy," he said, and what they have managed to do so far "deserves respect."
"There was indeed a discussion of whether there should be an adjustment of the existing program or whether there should be a new program," Asmussen said. There was "definitively no decision" on this.
For now, the first thing is to await the analysis currently being done by the troika, he said. Then, it is "the choice of Greece" how to proceed. Only thereafter, if need be, might there be further steps, he said. But what policymakers would choose cannot be stated at this point, nor whether reprofiling would be an option, he said.
With respect to Ireland, Asmussen reported that Dublin had "completely implemented" the program it signed up for and that the second tranche of financial aid could thus be disbursed.
"The question of a possible reduction in the interest rate" applied to Irish loans "played no role" in discussions here and there was "no decision taken," he said.
As to Portugal, "it is important that the Portuguese government implement the program fully," he said. "We assume that the program will be supported regardless of who governs Portugal in the future."
Schaeuble, he said, had called for "close monitoring" of Portuguese progress in case subsequent modifications become necessary.
In other comments, Asmussen reiterated the German call for a complete ban on uncovered short-selling.
(imarketnews.com)