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Greek minister insists global aid on its way

ATHENS: Brussels gave a much needed boost to Greek Finance Minister Yannis Stournaras yesterday as he sought to reassure Greeks that a long-delayed installment of crucial international aid was well on its way.
Stournaras said “there is no reason to worry” even as a four-billion-euro debt payment loomed and Germany warned that a deal on the aid could be weeks away.
An EU official in Brussels backed Stournaras assuring that international creditors would not allow Greece to default on its debt and were ready to give Athens two extra years to put its house in order.
“There will be no default, not accidental, not premeditated,” said the source, who spoke on condition of anonymity.
Two days after Greek Parliament passed a new round of austerity, Stournaras stressed that “Greece is doing what it has to do, and so is Europe, the tranche will be paid.”
Stournaras said Athens expected a decision on the funds at a meeting of euro zone finance ministers on Monday, although media reports said the aid decision could be delayed to Nov. 26.
Approval of the a new loan slice for Greece will top the agenda at that meeting in Brussels, which comes a day after Greek lawmakers are to vote on the 2013 budget.
Greece is surviving at present on two huge bailout packages from the European Union, International Monetary Fund and European Central Bank.
Private creditors also agreed in March to erase more than 100 billion euros ($127 billion) in the Greek public debt they held.
Analysts at Fitch Ratings said that approval by the Greek parliament late Wednesday of an additional 13.5 billion euros in austerity measures “shows that the near-term risk of Greece leaving the euro zone has receded.”
Capital Economics said: “We’re throwing in the towel on a Greek euro exit in 2012. But that’s a matter of timing, not a change in our fundamental position on Greece or on the broader debt crisis.”
On Thursday, European leaders welcomed the Greek parliament’s adoption of a package of more than 18 billion euros in new cuts and reforms, but German Finance Minister Wolfgang Schaeuble warned that there might not be a aid deal for weeks.
Greek newspapers on Friday criticized delays in securing the latest aid tranche, which has been frozen since June, with one daily accusing the creditors of “blackmail”.
“They are making fun of Greece,” the radical left newspaper Avghi charged. The left-wing Eleftherotypia newspaper accused Greece’s partners of “blackmail right up to the end”.
The liberal Kathimerini newspaper said the delay was the result of the EU’s “inability to reach agreement with the IMF on a compromise on the viability of Greek debt.”
Meanwhile, Greece’s public debt management agency PDMA said it would make a special debt issue worth 3.125 billion euros in one- and three-month treasury bills to help cover debt payments due on November 16.
The last-minute operation is meant to help Greece reimburse 4.1 billion euros on that date, given that Athens might not have received the 31.5 billion euros tranche due from international creditors.
Greece’s total debt is forecast to swell to 346 billion euros next year or almost 190 percent of economic output, while the economy is projected to shrink by a worse than expected 4.5 percent, which would mark its sixth year of recession.
A European Commission spokesman said Thursday the latest Greek austerity plan only clears the way for further talks on the country’s financing needs.
The austerity measures — which have triggered general strikes and sometimes violent protests by angry Greeks — include further salary cuts for public workers, a rise in the retirement age to 67 and pension cuts as well as planned deregulation of the labor market.
In late trading on Friday, the Athens stock market’s ASE index showed a gain of 0.97 percent to 802.37 points.

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