Greece positive on possible EU support

Greece positive on possible EU support

greek Finance Minister George Papaconstantinou

March 24, 2010, Wednesday/ 16:32:00
Greece said on Tuesday it expects a positive outcome at this week’s EU summit to its request for a European financial safety net despite Germany’s insistence that aid will not be discussed.

Finance Minister George Papaconstantinou said he was encouraged by comments from European Union institutions about ways to support Greece’s efforts to cut its huge budget deficit and public debt and reduce its borrowing costs. “Based on these statements, we expect a positive result on Thursday,” he told an investment conference in Athens. “There must be a political mechanism to ensure the stability of the euro zone and support the efforts made by every country,” he said, adding that data for the first two months of 2010 show Greek revenues rose and spending fell sharply. But there was no public sign that Chancellor Angela Merkel, facing massive public opposition to any bailout ahead of a regional election in May in which her centre-right coalition’s upper house majority is at stake, was willing to relent.

The risk premium that investors charge for holding Greek debt rather than German bonds narrowed after his comments to 327 basis points from around 344 at Monday’s settlement close, although it was still above last week’s levels. Greece needs to refinance some 16 billion euros in maturing debt between April 20 and May 23.

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