IMF to discuss additional measures with Greece

A mission EU and IMF officials will discuss the possibility of additional austerity measures for debt-ridden Greece when they begin talks on Wednesday. Greece last week requested talks with the European Union, the European Central Bank and the IMF over the details and policies that could form the basis for loans agreed upon by eurozone states under a three-year program. IMF to discuss additional measures with Greece The talks, initially scheduled to begin on Monday, were delayed pending the arrival of staff from the European Commission and the European Central Bank after Iceland's volcanic ash grounded flights throughout Europe. The Socialist government has already cut public sector pay and frozen pensions as part of its austerity program. It has also hiked taxes to try to slash 8 billion euros (11 billion dollars) off a budget shortfall that accounted for 12.9 per cent of the country's GDP last year. But the joint EU/IMF mission may request that it take additional measures for this year or next. They could include further cutting public sector wages for 2012- 2013 and reducing private sector salaries, slashing public sector jobs, increasing the retirement age and further reducing pensions. A handful of IMF officials had already arrived in Athens on Monday, but Greek officials said they will wait to begin talks until members of the EU delegation also arrive. Athens has not yet decided whether to apply to activate the emergency aid mechanism. The upcoming talks are necessary to nail down the final details of how a rescue could be mounted, if it were ever needed. With an estimated 30 billion euros coming from bilateral loans from eurozone states in the first year and another 10-15 billion euros expected from the IMF, the package would be the biggest multilateral bailout ever attempted. European officials have said they would attach strict conditions to the loans calling for Greece to slash its debt over several years. Athens, which is being forced to pay soaring borrowing costs in the markets, will need to refinance 11 billion euros worth of bonds as they mature in May. Greece will need to refinance a total of 54 billion euros in 2010. IMF officials have said the mission should last 15 days, and any European financing, part of the joint aid package, would have to be assured to trigger IMF funding. On Saturday, Finance Minister George Papaconstantinou said it would take a maximum of one or two weeks for eurozone countries to trigger the mechanism if Greece were to ask for it. Any decision to provide the eurozone loans would have to be made unanimously by all 16 government in the currency zone. Reports say Germany, where public opinion is strongly against helping Greece, might block or delay the aid. The majority of Greeks believe the austerity measures are unfair because they target lower earners. They also worry that the IMF will demand stricter measures in the next few years, which could bring about social unrest.

IMF to discuss additional measures with Greece

The talks, initially scheduled to begin on Monday, were delayed pending the arrival of staff from the European Commission and the European Central Bank after Iceland's volcanic ash grounded flights throughout Europe.

The Socialist government has already cut public sector pay and frozen pensions as part of its austerity program. It has also hiked taxes to try to slash 8 billion euros (11 billion dollars) off a budget shortfall that accounted for 12.9 per cent of the country's GDP last year.

But the joint EU/IMF mission may request that it take additional measures for this year or next.

They could include further cutting public sector wages for 2012- 2013 and reducing private sector salaries, slashing public sector jobs, increasing the retirement age and further reducing pensions.

A handful of IMF officials had already arrived in Athens on Monday, but Greek officials said they will wait to begin talks until members of the EU delegation also arrive.

Athens has not yet decided whether to apply to activate the emergency aid mechanism. The upcoming talks are necessary to nail down the final details of how a rescue could be mounted, if it were ever needed.

With an estimated 30 billion euros coming from bilateral loans from eurozone states in the first year and another 10-15 billion euros expected from the IMF, the package would be the biggest multilateral bailout ever attempted.

European officials have said they would attach strict conditions to the loans calling for Greece to slash its debt over several years.

Athens, which is being forced to pay soaring borrowing costs in the markets, will need to refinance 11 billion euros worth of bonds as they mature in May. Greece will need to refinance a total of 54 billion euros in 2010.

IMF officials have said the mission should last 15 days, and any European financing, part of the joint aid package, would have to be assured to trigger IMF funding.

On Saturday, Finance Minister George Papaconstantinou said it would take a maximum of one or two weeks for eurozone countries to trigger the mechanism if Greece were to ask for it.

Any decision to provide the eurozone loans would have to be made unanimously by all 16 government in the currency zone. Reports say Germany, where public opinion is strongly against helping Greece, might block or delay the aid.

The majority of Greeks believe the austerity measures are unfair because they target lower earners. They also worry that the IMF will demand stricter measures in the next few years, which could bring about social unrest.