Money Matters, Simplified.
Crisis-ridden Greece may take help from IMF
by Ishita Sood - March 18, 2010 - comments
“We have to keep all options open for whatever possibility. We would certainly prefer a European solution,” said Greece Prime Minister George Papandreou.
One of the few countries going through debt crisis, Greece may now seek funding from IMF in case its EU partners do not give it “clear support” in the coming week.
“We have to keep all options open for whatever possibility. We would certainly prefer a European solution,” said Greece Prime Minister George Papandreou.
EU nations are expected to meet on March 25-26 in Brussels to retrieve Greece out of the crisis.
Greece saw a fall in GDP
Government spokesman George Petalotis said the meet would be crucial as its outcome will decide about the country’s budget deficit and public debt.
“I believe the summit is when it will become evident whether the European partners want to support a country ... or whether we have to resort to some other solution,” Petalotis said.
“We are making a very big effort to achieve our targets, so as to secure clear support from the European Union in order not to have to go to the International Monetary Fund. But if the borrowing conditions, when we need to borrow, are not expected to be those that we want, (IMF funding) is a possibility which we certainly can follow,” he added.
“On our numbers, Greece needs to raise another 8-10 billion euros before mid-May. If this is not feasible at an acceptable cost, then help will be provided.” -- Erik Nielsen, chief European Economist in Goldman Sachs Group Inc.
Michael Meister, financial spokesperson for Angela Merkel’s office said, attempting a rescue of Greece “without the IMF would be a very daring experiment. Nobody apart from the IMF has these instruments.”
Greece, which secured EU support this month, saw a fall in its Gross Domestic Product (GDP) to 8.7 percent.
Greece needs to raise money via bonds
EU President Jose Barroso said that as long as “Greece is still borrowing at an unreasonably high interest rate, over 6 percent,” the country will keep “all options open” while preferring an EU solution.
“I’m not going to speculate now about dates. We have the instruments ready in case they are needed,” he said at a press conference.
The country needs to raise about $27.5 billion of bonds to retrieve itself from debt.
Recently, Greece sold 5 billion euros of bonds to yield three percentage points said Papandreou.
“On our numbers, Greece needs to raise another 8-10 billion euros before mid-May,” said Erik Nielsen, chief European Economist in Goldman Sachs Group Inc. “If this is not feasible at an acceptable cost, then help will be provided.”