Sep
30

Papandreou urges EU leaders to release bailout tranche

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Sep 30, 2011, 17:24 GMT

Papandreou held talks with Sarkozy in Paris after earlier meeting Van Rompuy on the margins of the EU’s Eastern Partnership summit in Warsaw.

Sarkozy said that the Greek premier had assured him of his ‘total determination’ to implement the cost-cutting measures demanded of Greece in return for international loans to keep its economy afloat.

France is the second-biggest contributor, after Germany, to the eurozone bailout fund that is propping up the Greek economy.

Papandreou repeated the assurances he gave in Germany on Tuesday, saying that Greeks were making ‘necessary sacrifices’ and that the government was committed to making Greece more competitive.

His visit came as international auditors were scrutinizing whether the efforts made by Athens so far deserved a 8-billion-euro (11-billion-dollar) loan installment from the EU and the International Monetary Fund (IMF).

Sarkozy warned the ‘failure of Greece would be the failure of all Europe’ and announced he would travel to Germany in the coming days for talks with Chancellor Angela Merkel on accelerating the implementation of a July eurozone rescue plan.

EU leaders on July 21 agreed to a second 109-billion-euro bailout package for Greece, eased conditions on outstanding loans and urged banks to accept a 21-per-cent loss on Greek bonds – in a bid to help the country conquer its debt mountain.

They also pledged to overhaul their 440-billion-euro rescue fund, allowing it to buy sovereign bonds on the markets, help governments before they need a full-blown bailout and fund tottering banks.

After the German parliament Thursday Austria’s parliament on Friday voted in favour of the plan, leaving only the parliaments of Malta, the Netherlands and Slovakia to vote on the deal.

While the reforms still has to be implemented there is speculation that more ambitious plans are afoot to contain Greece’s problems and prevent them from spreading across the euro area.

‘Although the latest master plan from 21 July is not yet done and dusted, eurozone policymakers are already considering new measures behind closed doors,’ a research note from ING bank said.

‘There is increasing evidence that eurozone policymakers are considering a further debt restructuring for Greece,’ it warned, calculating that private lenders would need to swallow at least a 50-per-cent loss to bring Greek debt under control.

Such a loss would be most keenly felt in France.

French bank are the most exposed of European banks to Greek sovereign debt.

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Paris/Brussels – Greek Prime Minister George Papandreou met with French President Nicolas Sarkozy and European Council President Herman Van Rompuy Friday as part of an ongoing diplomatic blitz to convince the EU to sign off on another tranche of vital bailout loans.

Papandreou held talks with Sarkozy in Paris after earlier meeting Van Rompuy on the margins of the EU’s Eastern Partnership summit in Warsaw.

Sarkozy said that the Greek premier had assured him of his ‘total determination’ to implement the cost-cutting measures demanded of Greece in return for international loans to keep its economy afloat.

France is the second-biggest contributor, after Germany, to the eurozone bailout fund that is propping up the Greek economy.

Papandreou repeated the assurances he gave in Germany on Tuesday, saying that Greeks were making ‘necessary sacrifices’ and that the government was committed to making Greece more competitive.

His visit came as international auditors were scrutinizing whether the efforts made by Athens so far deserved a 8-billion-euro (11-billion-dollar) loan installment from the EU and the International Monetary Fund (IMF).

Sarkozy warned the ‘failure of Greece would be the failure of all Europe’ and announced he would travel to Germany in the coming days for talks with Chancellor Angela Merkel on accelerating the implementation of a July eurozone rescue plan.

EU leaders on July 21 agreed to a second 109-billion-euro bailout package for Greece, eased conditions on outstanding loans and urged banks to accept a 21-per-cent loss on Greek bonds – in a bid to help the country conquer its debt mountain.

They also pledged to overhaul their 440-billion-euro rescue fund, allowing it to buy sovereign bonds on the markets, help governments before they need a full-blown bailout and fund tottering banks.

After the German parliament Thursday Austria’s parliament on Friday voted in favour of the plan, leaving only the parliaments of Malta, the Netherlands and Slovakia to vote on the deal.

While the reforms still has to be implemented there is speculation that more ambitious plans are afoot to contain Greece’s problems and prevent them from spreading across the euro area.

‘Although the latest master plan from 21 July is not yet done and dusted, eurozone policymakers are already considering new measures behind closed doors,’ a research note from ING bank said.

‘There is increasing evidence that eurozone policymakers are considering a further debt restructuring for Greece,’ it warned, calculating that private lenders would need to swallow at least a 50-per-cent loss to bring Greek debt under control.

Such a loss would be most keenly felt in France.

French bank are the most exposed of European banks to Greek sovereign debt.

Article source: http://www.monstersandcritics.com/news/business/news/article_1666140.php/Papandreou-urges-EU-leaders-to-release-bailout-tranche

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