IMF says Greece could sell more assets to pay back debts

12th May 2011, Comments 0 comments

The IMF said on Thursday its analysis did not point to Greece having to restructure its debt, noting the country had assets worth several hundred billion euros which it could sell.

Greece is being supported by an IMF/European Union rescue package worth 110 billion euros ($155 billion), but there is a widespread belief on financial markets that it will need an additional 60 billion euros over the next two years.

The International Monetary Fund's director for Europe, Antonio Borges, told a press conference hosted by the European Central Bank that the latest review of the aid programme in February had concluded that Greece's debt was sustainable.

It "therefore does not require restructuring," he added.

Financial markets and economists are questioning whether Greece will be able to pay back its debts on time however, or whether it might have to extend the repayment period or reimburse less than the full amount owed.

Despite a huge effort in 2010 -- when hundreds of thousands of Greeks saw their wages and pensions trimmed and many lost their jobs -- the country failed to meet its deficit reduction goals as the economy shrank faster than expected.

The next IMF review is due in June but "at this point, on the basis of our programme we think that Greece should be moving in the right direction to as position where its debt is sustainable," Borges said.

He noted meanwhile that the Greek government held hundreds of millions of euros in real-estate and "other very valuable assets," and said some could be sold to "provide an additional element of credibility to the Greek situation."

Borges said such a move would "be most welcome."

An agency which owned the state's real-estate assets had a balance sheet of "about 280 billion euros," the IMF official said.

Greece had committed itself to a programme of privatisations worth about 50 billion euros, he noted, but that "is probably less than 20 percent of all the assets that the Greeks could privatise."

© 2011 AFP

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