ATHENS: A year after Greece took an EU-IMF bankruptcy bailout and bit into a bitter austerity pill its economy is still in dire straits with recession and an oversized debt making it a market pariah.
The country has announced a new round of fiscal measures and a massive privatisation drive in a
bid to banish talk of an inevitable restructuring of its debt, now at €340 billion (RM1.48 trillion) and
ticking ominously. But despite the effort, investors see restructuring as a bygone conclusion as the Greek
recovery programme supervised by the European Union and the International Monetary Fund shows signs of running out of steam.
Worse still, the EU-IMF remedy has brought inflation and unemployment levels unseen in a decade to accompany an output contraction of 4.5% last year. Under the terms of its debt rescue last year, Greece is obliged to start raising its own money in 2012 and reduce its dependency on last year’s bailout loan of €110 billion from the EU and IMF.
At current interest rates, this looks highly unlikely. Last Friday, Greek 10-year bond yields hit 13.83%, up from 13.156% the previous day, as rumours spread of a possible debt restructure that could force bondholders to accept either lengthened repayment periods or an outright reduction in their loans. The run was fuelled by an apparent suggestion by Germany’s Finance Minister Wolfgang Schaeuble to Die Welt daily that Greece may have to restructure its debt if the IMF, the European Central Bank and the European Commission determined in a June report that it is unable to cope with repayments. Schaeuble later insisted that his remark that “further steps” would have to be taken in such a case had been wrongly interpreted by English-language media. — AFP
theSun ON MONDAY | APRIL 18, 2011
2bz4money: Hope it will not to our country..