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The Hellenic Radio (ERA): News in English, 10-04-21

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From: The Hellenic Radio (ERA) <>


  • [01] Negotiations amid Speculative Attacks

  • [01] Negotiations amid Speculative Attacks

    Wednesday, 21 April 2010 14:48

    Greece has started discussions with ECB and IMF delegations to finalize borrowing terms in the event the rescue mechanism is activated. In the meantime, speculative attacks continue pushing spreads on 10-year Greek state bonds to record high over 500 base points while the Athens Stock market recorded new losses. Finance Minister, G. Papakonstantinou said that all sides have started discussions with willingness to reach a solution and left open possibility to activate rescue mechanism even before the end of negotiations. Euro region member countries appear prepared to assist.

    First Contacts

    Discussions between the government and the ECB and IMF delegations on the terms of the rescue mechanism have started amid strong speculative attacks that pushed spreads up to a new record high.

    Negotiations aim to reach a two part agreement:

    Financing, in other words amount of loan and borrowing terms Specification of policies that Greece should implement to receive the loan.

    Mr. Papakonstantinou said that negotiations would last two weeks and all parties would sign a text recording the terms and amount of loan after the end of negotiations.

    The text will actually be a report on progress that Greece should submit to the European Commission till May, 15 within the framework of the country's monitoring since February.

    Finalization of agreement means that rescue mechanism could be activated immediately without any delays.

    Spreads up-Losses in Athens Stock Market

    Greek 10-year state bonds recorded a historic high up to 529 basis points to later drop below 500bp. Analysts believe that fluctuations may continue during discussions on austerity measures that Greece must take till 2012. Rise in spreads had a negative impact in Athens stock market transactions with general index closing at 1.936,43, a 1.30% drop and bigger losses recorded in the banking and health sectors.

    Papakonstantinou: "Immediate Activation if Necessary"

    Amid continuing speculative pressures, Finance Minister, G. Papakonstantinou left open possibility for activation of rescue mechanism even before the conclusion of negotiations.

    G. Papakonstantinou repeated that discussions concern 2011-2012 two year period and clarified that measures taken are sufficient for the current year. He ruled out rumours about re-negotiation of state debt.

    On his part, government spokesman said that measures taken are sufficient and added that reforms were mandatory and not imposed by the IMF.

    "We should not be seeking for scapegoats, looking at the tree and losing the forest. We should lay our problems down with honesty and face them with courage" said G. Petalotis and stressed "there are neither foreign saviors nor secret enemies" but only real problems which the Greek state has been nurturing for a long time but it is high time to face them with courage and honesty".

    The government spokesman also clarified "whatever decisions may be taken if European rescue mechanism is activated have no relation to many cases of countries that have referred to IMF".

    Finance Minister, G. Papakonstantinou will meet again with ECB -IMF delegation on Friday and immediately leave for the US to attend IMF spring meeting and met with US Treasury Secretary Timothy Geithner and the head of IMF Dominique Strauss-Kahn.

    The foreign experts will have several contacts with executives at the Ministries for Finance, Employment, Health and Interior as well as social sectors.

    Dispute over IMF

    Possibility of the country's recourse to the rescue mechanism has sparked strong dispute between the government and opposition parties.

    Interior Minister Yiannis Ragusis launched a strong attack against the ND party blaming it for leading the country to the brink of catastrophe and now trying to underrate the European rescue mechanism which is blatant insult to the sacrifices of Greek people

    Main opposition ND party spokesman Panos Panagiotopoulos said his party would not give an alibi to the Prime-minister and blamed the government for attempting to dedemonize the IMF.

    LAOS president G. Karatzaferis said "we can still save the situation provided there is another government policy. This government appears to have given up".

    President of SYRIZA Parliamentary GROUP Alexis Tsipras proposed referendum before referring to IMF.

    SEB president A. Daskalopoulos called for immediate reference to European rescue mechanism or else he warned that the country risked bankruptcy and exit from eurozone.

    Europe Prepared

    Germany is waiting for Greece's official request for financial assistance said German Finance Minister, Wolfgang Schaeuble who called German deputies to be prepared to ratify the request without delays.

    France has committed to give a 3.9 billion loan this year of a total 6.3 billion at 5% interest rate. The assistance is in the form of bilateral loans. We are trying to move rapidly in order to be ready when Greece decides activation of rescue mechanism said French Finance Minister Christine Lagarde.

    Head of German Central Bank, Axel Weber warned of tough blow to the other euro region member states in the event of Greece's bankruptcy.

    Sources: - 105.8-NA/PA

    News item: 35707

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