Juncker said Greece needed to adopt a process similar to the Treuhand agency, used by Germany to sell off 14,000 former East German firms between 1990 and 1994 – even though Treuhand failed to deliver any profit, oversaw huge job losses and eventually closed its books with a deficit. But he did appear to acknowledge that the Greeks were hostile to foreign officials appearing to take charge: "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone." Athens, together with European leaders and the IMF, must now start work on a second €110bn bailout for Greece, which must be finalised by September and is likely to include private-sector involvement. The European commission conceded on Saturday, after the two-hour Eurogroup teleconference agreed the fifth tranche payout, that any plan to cut Greece's debt of 160% of economic output would be at risk of being derailed by internal unrest or external economic conditions. Growth just one percentage point below expectations, it said, would push Greece's debt to 170% of GDP, and rising, past 2020. For the first time, the commission's report also discusses debt restructuring, including a possible 40% "haircut" – a forced reduction in the value of Greek bonds – which would devastate Greek banks and, the report warns, could reverberate on Ireland, Portugal and Spain.
Access Investments-Building Awareness - European Union-ROMANIA
Monday, July 4, 2011
Juncker said Greece needed to adopt a process similar to the Treuhand agency, used by Germany to sell off 14,000 former East German firms between 1990 and 1994 – even though Treuhand failed to deliver any profit, oversaw huge job losses and eventually closed its books with a deficit. But he did appear to acknowledge that the Greeks were hostile to foreign officials appearing to take charge: "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone." Athens, together with European leaders and the IMF, must now start work on a second €110bn bailout for Greece, which must be finalised by September and is likely to include private-sector involvement. The European commission conceded on Saturday, after the two-hour Eurogroup teleconference agreed the fifth tranche payout, that any plan to cut Greece's debt of 160% of economic output would be at risk of being derailed by internal unrest or external economic conditions. Growth just one percentage point below expectations, it said, would push Greece's debt to 170% of GDP, and rising, past 2020. For the first time, the commission's report also discusses debt restructuring, including a possible 40% "haircut" – a forced reduction in the value of Greek bonds – which would devastate Greek banks and, the report warns, could reverberate on Ireland, Portugal and Spain.
Subscribe to:
Post Comments (Atom)
2 comments:
Boc said Saturday in the northwestern city of Cluj-Napoca, where he attended the opening of a bypass road to traffic, that road works in Romania cannot be done at “any price” since the Government has set cost standards for public works.
==========================================================
ProCredit Bank Romania has increased its share capital by around 12.5 million lei (EUR3 million) to RON152.8 million, the lender said in a statement Monday.
Updates with S&P comment in second paragraph. See EXT4 for more on Europe’s sovereign-debt crisis.)
July 4 (Bloomberg) -- Europe pulled Greece back from the brink of default, gaining time to hammer out a formula for ending the debt crisis.
European finance ministers authorized an 8.7 billion- euro ($12.6 billion) loan payout to Greece by mid-July, basing a second three-year bailout package on talks to corral banks into maintaining their Greek debt holdings. A proposed debt rollover plan for Greece may still put the country in “effective default,” Standard & Poor’s said today.
“For markets, what matters is that Greece has got the money to navigate through the summer,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London. “For the private-sector involvement, there is clearly a lot to discuss, but I think they will deliver before September.”
Europe’s agreement on July 2 to make the payout climaxed a pivotal week for Greece and the euro, providing a respite from the political tensions, clashes with central bankers and jousting with investors that have dogged the crisis-fighting effort. The finance chiefs gather next week to tackle Greece’s long-term lifeline.
Bonds, Stocks
Financial markets offered breathing space as well, with Greece’s escape from imminent default triggering gains last week in the euro, European stocks and the bonds of fiscally stretched countries such as Spain and Italy.
The euro pared gains after the S&P comments today, trading little changed at $1.4535 as of 3:27 p.m. in Tokyo, after rising as much as 0.4 percent earlier.
Greek parliamentary passage of new budget cuts last week gave euro-area governments political cover to release the funds, part of the 110 billion-euro bailout offered when Greece became the first victim of the crisis in May 2010.
Prospects for turning the savings legislation into reality are clouded by a lack of opposition support and public hostility that boiled over into pitched battles between teargas-spraying police and rioters outside the Athens parliament last week.
Responding to his counterparts’ decision, Finance Minister Evangelos Venizelos said that it is critical for Greece to deliver “prompt and effective implementation” of the 78 billion-euro of austerity measures.
Post a Comment