IMF 'confident' of timely Greek finance agreement

25th April 2010, Comments 0 comments

The International Monetary Fund will reach an agreement with Greece before Athens is forced to borrow billions to cover its budget, IMF managing director Dominique Strauss-Kahn said on Sunday.

"The IMF, the European partners, and everyone involved in the financing effort recognizes the need for speed. I am confident that we will conclude discussions in time to meet Greece's needs," Strauss-Kahn said in a statement after meeting here with Greek Finance Minister George Papaconstantinou.

The country has overall public debt of about 300 billion euros (400 billion dollars) and the return it must pay to secure new loans has skyrocketed in recent weeks as investors feared Greece may be heading for a default.

The rate on benchmark Greek 10-year bonds has risen on private capital markets from around five percent last year to over eight percent this week.

Athens must normally go back to markets for billions in new loans by mid May.

But Germany, which would likely be the biggest European contributor to a Greek bail-out, might still refuse to pony up, Finance Minister Wolfgang Schaeuble said Sunday in an interview.

"The fact that neither the European Union nor the German government has taken a decision means: it could be positive or negative," he told the mass-selling Bild am Sonntag newspaper.

"It depends alone on whether Greece in the coming years continues along the saving course on which it has embarked. The Greek finance minister said that as well."

Germany, the biggest economic power in the 16-nation eurozone, would likely be asked to contribute around 8.4 billion euros to a rescue package estimated at around 45 billion euros.

Any aid would also require the approval of the German parliament.

© 2010 AFP

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