Eurozone finance ministers hinted on Friday that Greece may be given more time to pay its debts, though they ruled out a third bailout, which most economists believe will be needed before Athens can get back on its feet.
At a meeting of the 17-nation currency bloc in Nicosia, Cyprus, there were signs of increasing flexibility and optimism, but Spain appeared to be moving closer to making a formal request for financial assistance.
The Greek finance minister said the atmosphere had eased after previously strained talks between Athens and its creditors and a deal could be signed before the end of October.
"It seems to us quite clear that Greece has already produced a huge effort but will have to continue to do so," said IMF boss Christine Lagarde.
"And the target when it comes to achieving debt sustainability is very high, so there are various ways to adjust: time is one, and that needs to be considered as an option."
Stock markets rallied across the world, continuing a strong run since the ECB said it was prepared to lend unlimited amounts to distressed sovereign nations, though with strict conditions.
The FTSE jumped 95 points to 5915 while the French CAC leaped 2.3% to 3581. The new Greek coalition government is seeking a two-year extension to 2016 for meeting a budget reduction programme.
The threat of a general strike and violent protests over a further round of cuts that will result in 50,000 public sector job losses have strengthened the hand of Greek negotiators, along with predictions that a five-year recession will result in a total 20% fall in GDP in 2013.
But the smiles among finance ministers as the meeting closed disguise huge disquiet at protests in Spain and Portugal this week.
Spain, deflecting pressure to spell out whether it needs more European financial support, told eurozone finance ministers it will set clear deadlines for structural economic reforms by the end of the month.
"We will adopt a new set of reforms to boost growth … It will be in line with the recommendations of the European commission," economy minister Luis de Guindos said.
However, Madrid is in deep financial trouble and faces calls from several of its regions for the country to break up rather than continue deep austerity cuts.
More than 1 million people marched in Barcelona this week in favour of Catalan independence . There was also confusion in Spain over the stance on a proposed €300bn bailout package that is understood to be under discussion in Brussels between EU officials and Mariano Rajoy's right of centre government.
Several eurozone officials have speculated that Spain may apply in time for the next meeting of eurozone finance ministers, on October 8, while Rajoy has dismissed talk of a further bailout.
He is also resisting the terms of the bond buying programme announced by the ECB, which he says is draconian and would intensify the cuts imposed on welfare spending. Spain's 2013 budget and a detailed audit of the capital needs of its banking sector are both due in a fortnight.
guardian.co.uk
At a meeting of the 17-nation currency bloc in Nicosia, Cyprus, there were signs of increasing flexibility and optimism, but Spain appeared to be moving closer to making a formal request for financial assistance.
The Greek finance minister said the atmosphere had eased after previously strained talks between Athens and its creditors and a deal could be signed before the end of October.
"It seems to us quite clear that Greece has already produced a huge effort but will have to continue to do so," said IMF boss Christine Lagarde.
"And the target when it comes to achieving debt sustainability is very high, so there are various ways to adjust: time is one, and that needs to be considered as an option."
Stock markets rallied across the world, continuing a strong run since the ECB said it was prepared to lend unlimited amounts to distressed sovereign nations, though with strict conditions.
The FTSE jumped 95 points to 5915 while the French CAC leaped 2.3% to 3581. The new Greek coalition government is seeking a two-year extension to 2016 for meeting a budget reduction programme.
The threat of a general strike and violent protests over a further round of cuts that will result in 50,000 public sector job losses have strengthened the hand of Greek negotiators, along with predictions that a five-year recession will result in a total 20% fall in GDP in 2013.
But the smiles among finance ministers as the meeting closed disguise huge disquiet at protests in Spain and Portugal this week.
Spain, deflecting pressure to spell out whether it needs more European financial support, told eurozone finance ministers it will set clear deadlines for structural economic reforms by the end of the month.
"We will adopt a new set of reforms to boost growth … It will be in line with the recommendations of the European commission," economy minister Luis de Guindos said.
However, Madrid is in deep financial trouble and faces calls from several of its regions for the country to break up rather than continue deep austerity cuts.
More than 1 million people marched in Barcelona this week in favour of Catalan independence . There was also confusion in Spain over the stance on a proposed €300bn bailout package that is understood to be under discussion in Brussels between EU officials and Mariano Rajoy's right of centre government.
Several eurozone officials have speculated that Spain may apply in time for the next meeting of eurozone finance ministers, on October 8, while Rajoy has dismissed talk of a further bailout.
He is also resisting the terms of the bond buying programme announced by the ECB, which he says is draconian and would intensify the cuts imposed on welfare spending. Spain's 2013 budget and a detailed audit of the capital needs of its banking sector are both due in a fortnight.
guardian.co.uk
No comments:
Post a Comment