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FINANCE > Greece ‘committed’ to reforms to avert bankruptcy: Minister

ATHENS - Agence France-Presse

As hard austerity talks between Athens and western creditors continue, Greek Finance Minister Yannis Stournaras says the country is committed to implementing a bunch of new imeasures in a bid to ‘remove the threat of bankruptcy’

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Employees of Greece’s ATEbank shout anti-government slogans in front of Greek Parliament during a demonstration in Athens on August 3, 2012. This would have cost over 5,000 jobs at a time when the country is facing record unemployment, and the state would still have been obliged to find 14 billion euros ($17.2 billion) to compensate depositors and return 6.3 billion euros in funding to the eurozone. AFP photo

Employees of Greece’s ATEbank shout anti-government slogans in front of Greek Parliament during a demonstration in Athens on August 3, 2012. This would have cost over 5,000 jobs at a time when the country is facing record unemployment, and the state would still have been obliged to find 14 billion euros ($17.2 billion) to compensate depositors and return 6.3 billion euros in funding to the eurozone. AFP photo

Greece is committed to reforms that are vital if it is to avert bankruptcy, the finance minister said in remarks published yesterday, warning the next few weeks were crucial for its future in the euro.

The comments by Yannis Stournaras came ahead of a meeting later the same day with officials from the “troika” of international creditors -- the European Union, the European Central Bank and the International Monetary Fund on budget cuts needed to unlock the next tranche of aid under a massive bailout package.

“The country is committed to implementing a series of measures and reforms to revive the economy and permanently remove the threat of bankruptcy,” Stournaras told the Ethnos newspaper.

He acknowledged that Greeks have had to endure “major sacrifices” as the new coalition government imposes tough austerity measures, including salary and pension cuts, demanded by its creditors in return for aid.

“The coming weeks are crucial for the country’s survival because if we go down a different path than logic tells us, it could drive us outside the eurozone and into bankruptcy.” The troika is seeking budget cuts of another 11.5 billion euros ($14 billion) to unlock a 31.5-billion-euro loan disbursement in September as part of Greece’s latest 130-billion-euro rescue package.

The budget cuts, applicable in 2013 and 2014, were originally to have been finalised last month but back-to-back elections postponed the decision.

Privatization program
“There is a serious effort” to reach an agreement, a finance ministry source said as the talks began in Athens, adding that the atmosphere was “good.”

Stournaras said he hoped that Greece could emerge from its deep recession by speeding up a privatization program and structural reforms which are also being sought by its international creditors.
Greece was given a lifeline last week when the ECB agreed on a move which will give Athens access to another 4 billion euros of funds and ensure its financial survival until September, a German newspaper reported on Aug. 4

ECB ‘has saved Greece’

BERLIN – Reuters

The European Central Bank (ECB) has saved Greece from bankruptcy for the time being by securing it interim financing in the form of additional emergency loans from the Bank of Greece, German newspaper Die Welt said on Aug. 4.

The ECB’s Governing Council agreed at its meeting on Aug. 1 to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in its Saturday edition.

Until now the Bank of Greece could only accept T-Bills up to a limit of 3 billion euros ($3.70 billion) as collateral for emergency liquidity assistance (ELA) but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources.

The ECB Governing Council gave this wish the green light, the paper said.

August/06/2012

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