SCZONE, Tokyo Metropolitan Government sign MoU on green hydrogen cooperation    Egypt's PM meets Tokyo governor, witnesses signing of education agreements    Egypt's Sisi, France's Macron discuss Gaza ceasefire efforts in phone call    Egypt welcomes international efforts for peace in Ukraine    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt expresses 'deep dissatisfaction' to Netherlands over embassy attack    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    At TICAD, Egypt's education minister signs pacts with Casio, SAPIX    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Indian tourist arrivals to Egypt jump 18.8% in H1-2025: ministry data    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Greece has weeks left before bankruptcy
Published in Almasry Alyoum on 04 - 10 - 2011

ATHENS - Greece has enough money to pay pensions, salaries and bondholders through mid-November, the finance minister said Tuesday, as global markets sank on worries that a messy default could bring down European banks and trigger another global recession.
The Athens stock index was down more than 6 percent by late afternoon while the main Europe markets fell more than 3 percent. The turmoil endangered French-Belgian bank Dexia, whose shares plunged as much as 40 percent, on worries about its exposure to Greek bonds.
Greece had previously said it would start running out of money in mid-October if it didn't get the next 8 euros billion installment of the 110 euros billion rescue package it has been relying on since May 2010.
Evangelos Venizelos sought to reassure Greeks and investors that the country can hold on a little longer while its rescue creditors decide whether to give it more loans.
"Until mid-November it is clear there will be no problem," said Venizelos, upon returning from a eurozone finance ministers' meeting in Luxembourg.
The worry is that a messy default by Greece — in which sharp losses are imposed with little warning on bondholders, among which are many European banks — would cause massive losses in the financial sector and trigger a credit crunch. That could stifle loans to the real economy, cause huge uncertainty and push the world economy into another recession.
Eurozone ministers have indicated that while Greece would get its next batch of loans, that decision would not be made until later this month, after the international debt inspectors in Athens complete their review of Greece's reforms.
The inspectors from the IMF, European Central Bank and European Commission, collectively known as the troika, had suspended their review for several weeks in September amid concern over delayed implementation of austerity measures and missed targets. They returned to Athens last week, and are continuing negotiations.
The delay had raised the possibility that Greece would run out of money to pay salaries and pensions and possibly bondholders.
To convince the troika that it should get the next bailouts loans, the Greek government announced a series of new measures, including extra taxes on property, and began pushing through plans to suspend tens of thousands of civil servants on reduced pay.
"We're at the worst moment under the worst conditions. We're dependent on the help and lending of our institutional partners," Venizelos said.
"We have to make a super-human effort to win this wager of our times. There was this false sense of a standard of living that we, ourselves created," the minister stressed. "What's important now is to protect the country and to make clear and final decisions."
But the measures have outraged Greeks who over a year and a half have seen their incomes slashed and their living costs climb due to multiple tax hikes. Locked in a recession that is forecast to see the economy contract by 5.5 percent this year, even members of the government have voiced concern and said the public cannot face any more taxes.
Unions have responded with repeated demonstrations and strikes. They have taken over government buildings, forcing ministers to reschedule meetings with the troika on several occasions.
Most economists agree Greece is unlikely to be able to get out of its debt hole through austerity measures alone and many have called for private bondholders — among which many European banks — to take sharper losses than currently planned in the second bailout deal.
The view was reinforced this week by figures in the Greek 2012 budget which showed it had missed its deficit reduction targets for this year. The budget gap is expected to reach 8.5 percent of GDP, higher than the original target of 7.8 percent. This could increase further to reach 9 percent if strikes and civil protests delay the implementation of reforms, Venizelos said.
The argument in favor of letting Greece write off more of its debt was underscored by figures predicting that the Greek government would next year post a budget surplus if it were not for the huge amount of interest it is paying on its existing debt.
Allowing Greece to cut loose some of that debt, for example by imposing 50 percent losses on private bondholders rather than the 21 percent currently negotiated so far, would be a crucial step to healing the country's crisis.
Eurozone leaders are now assessing how best to protect European banks and other struggling economies from such a move. The European rescue fund is likely to be increased in size after being given new powers to shore up banks and governments in need.
On Tuesday, Venizelos said Greece will issue 880 euros million in bonds to Finland as collateral for the country's bailout loans to Athens under the second bailout. Finland had demanded guarantees in exchange for participating in the second package.
Other countries had threatened to demand similar guarantees if Finland got its way, but Venizelos said that no other eurozone states wanted the same collateral deal.


Clic here to read the story from its source.