THE GREEK government took a step towards drawing down the emergency credit line promised by its EU partners by calling for “discussions” on the €45 billion rescue net with the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).
Although the Greek authorities insisted yesterday that they had not asked for the aid mechanism to be activated, EU economics commissioner Olli Rehn quickly agreed to send a delegation to Athens for talks next Monday.
Amid renewed anxiety in the markets over how special aid for Greece might be disbursed, the euro fell against the dollar to break five successive days of gains.
The talks in Athens next Monday take place against the backdrop of a warning by ECB executive board member Juergen Stark that the sovereign debt problems that have befallen Greece may represent the next phase of the global financial crisis.
Greek finance minister George Papaconstantinou made public his request for talks with the European and IMF authorities as Greek bond spreads climbed above the record levels seen before euro finance ministers signed off on the rescue last Sunday.
EU leaders have insisted that the system of bilateral and IMF loans should be deployed only as a last resort.
Although the cost of servicing Greek debt abated this week as George Papandreou’s government sold €1.58 billion in short-term debt, the yield on 10-year Greek paper climbed above 7.3 per cent yesterday amid renewed doubts about the country’s prospects.
Mr Papandreou’s administration faces a major test next month with the planned sale of a 10-year €8.5 billion bond. He did not speculate yesterday on the likely outcome of the talks. “Whether we activate or don’t activate the mechanism . . . [the commission, ECB and IMF] will monitor and play a significant role in our future course,” he said.
News of the Athens meeting emerged as Mr Papaconstantinou published his letter to Mr Rehn, ECB president Jean-Claude Trichet and IMF managing director Dominique Strauss-Kahn.
“The Greek authorities are requesting discussions . . . on a multi-year programme of economic policies . . . that could be supported with financial assistance from the euro-area Member States and the IMF,” it said.
Mr Stark said Greece must resolve its own problems and should not look for help from Frankfurt or London. Pointing out that Ireland did seek special assistance, he said it was up to the Greek authorities to do their job.
With the public finances in 13 of the 16 euro zone countries in breach of the single currency’s rulebook, he expressed concern about the fiscal position of sovereign countries. “We may already have entered the next phase . . . sovereign debt crisis following on the financial and economic crisis.”
