Greece requires an extra 20 million dollars to recover: E.U
Friday, February 3rd, 2012 3:53:02 by Hamza Jahangir
Debt-ridden Greece is close to a deal with private investors to reduce its debt burden by about 100 billion euros ($131.49 billion), and that — plus an agreement to enact deep spending cuts — could pave the way for a 130-billion-euro
($170.94 billion) bailout from its European partners and the International Monetary Fund. But on Thursday a European Union official said this plan was not enough to help fix Greece’s problems, which are getting worse as the effects of the recession take hold.
In order to bring Greece’s debt burden to a sustainable level — 120 percent of its economic output in eight years’ time — the country’s international debt inspectors calculate that Greece needs an additional 15 billion euros —
a shortfall it believes should be made up by the rest of the 17-country eurozone, the European official. The official spoke on condition of anonymity because of the sensitivity of the matter
The extra money, in theory, could come either from the other euro countries or by having the European Central Bank, its national counterparts and state-owned banks such as France’s Caisse de Depots taking a loss on their Greek
bond holdings, the official said.
Analysts estimate that the European Central Bank holds 50 billion to 55 billion euros ($65.74 billion to $72.32 billion) in Greek bonds by face value, but it can’t simply write them down without breaking the EU treaty, which prohibits
the bank from financing governments. Writing off a debt would be, in effect, transferring money directly to a government.
The new push for Greece’s public and government creditors to take a cut on their investments — dubbed the “official sector involvement,” or OSI — is a new front in the battle to save the country from a potentially devastating default.
So far, the euro zone and the IMF have given billions in bailout loans to the struggling country, but they haven’t been asked to take losses.
Short URL: https://www.newspakistan.pk/?p=11613
Posted by Hamza Jahangir
on Feb 3 2012. Filed under Latest News, World.
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