By Maria Petrakis - Sep 18, 2011 2:23 AM GMT+0700
Greek Prime Minister George Papandreou canceled a U.S. visit that was to begin tomorrow, saying he needed to remain in the country for a “critical” seven days in its effort to avert a bond default.
“The coming week is particularly critical for the implementation of the July 21 decisions in the euro area and the initiatives which the country must undertake,” said a statement e-mailed today from Papandreou’s office in Athens. No further details were given.
Greece is rushing to meet demands from international and European Union partners that will allow the release of a sixth tranche of loans to prevent default. The government on Sept. 11 announced a levy on properties to help raise 2 billion euros ($2.8 billion) in a bid to show it’s serious about plugging a swelling budget deficit, key to getting a second financing package agreed to by EU leaders on July 21.
EU and International Monetary Fund inspectors will hold a conference call with Finance Minister Evangelos Venizelos to resume and accelerate their review on Sept. 19, the Athens-based ministry said yesterday. Venizelos said today that putting the July 21 accord in place was the priority for the country.
“Our problem is to ensure that we get the sixth payment and each future payment with the best possible terms as we can’t keep having a repeat of the same scenario,” Venizelos told reporters in Wroclaw, Poland, after a meeting with European counterparts, according to an e-mailed statement today from the Finance Ministry.
No Bankruptcy
In later statements, he dismissed talk of the country declaring bankruptcy and said Papandreou canceled his visit to be prepared to take quick decisions in the coming week.
“The situation is serious in the sense that we need to take serious, definitive and complete decisions,” he said in a statement e-mailed from the ministry late today.
Papandreou’s trip cancellation “isn’t due to the fact there is an economic risk or some extraordinary economic event but to the fact that now is the time to take the necessary political, legislative, organizational and administrative initiatives which will definitively lead the country out of this recycled pressure,” Venizelos said.
An editorial in Kathimerini newspaper published today entitled “Your Country Needs You” called the U.S. trip “inexplicable” and said a week-long absence wasn’t compatible “with the gravity of the current situation, as Greece stares into the abyss.”
Meetings Planned
Papandreou had planned to meet officials including IMF Managing Director Christine Lagarde and U.S. Treasury Secretary Timothy F. Geithner on his trip to New York and Washington. His first meeting was scheduled for New York tomorrow. A separate meeting this month between Lagarde and Venizelos is still planned, a Finance Ministry official said.
Papandreou earlier this week promised a “decisive battle” for budget cuts to persuade European governments and the IMF to release the 8 billion euro loan installment.
Greece is now looking to the next meeting of euro-area finance ministers, on Oct. 3, for a decision on the release of the installment. The loan would be disbursed by mid-October, enabling the government to pay its bills through the end of the year.
Greece has the cash reserves to cover its needs for October, Deputy Finance Minister Filippos Sachinidis said on Sept. 12
Higher taxes and cuts in wages and pensions in return for a 110 billion euro May 2010 package of loans from the EU and IMF have weighed on the Papandreou government’s standing with Greeks, with his Pasok party now trailing the main opposition in opinion polls. EU partners have said the sixth loan won’t be paid if they aren’t convinced Greece is doing enough to curb a budget gap that soared to 15.4 percent in 2009.
To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net
To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net
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