LONDON — A new rescue package for Greece is taking shape, one that would offer billions of euros in new loans in return for accelerated privatization and tougher tax collection measures on the part of the beleaguered Greek government, European officials said on Tuesday.
While the agreement for as much as 60 billion euros ($86 billion), would in theory address Greece’s need for cash this year and next, it puts off for the time being a restructuring, hard or soft, of Greece’s huge debt burden.
At the deal’s heart would be an informal understanding that the private sector holders of Greek government bonds might be persuaded to roll over their debts, or extend new loans when their older obligations come due.
By taking on more dubious Greek risk — backed by new money from Europe and the International Monetary Fund — exposed banks would not just step back from the precipice of a “haircut,” or a forced loss on their bonds, they might also hope that in another two years Greece will be in a better position to repay its debts in full.
The expectation that Europe will again come to Greece’s rescue bolstered both the euro and stocks on Tuesday. Yields on Greek 10-year bonds have dropped sharply, to 15.7 percent on Tuesday from a high of 16.8 percent last week. European stocks rose nearly 2 percent, and the United States market was up about 1 percent.
“Restructuring is off the table,” a senior official in the Greek Finance Ministry said. “For now it is all about growth, growth, growth.” This person, who spoke on condition of anonymity while the talks continued, said an announcement from the European Union, the I.M.F. and the European Central Bank could come as soon as Friday or early next week.
Later in June, the European Union first and then the I.M.F. would approve the additional financing, thus clearing the way for 12.5 billion euros to be disbursed to Athens at the end of the month.
The new loans, however, will be forthcoming only if more austerity measures are introduced.
Along with faster progress on privatization, Europe and the fund have been demanding that Greece finally begin cutting public sector jobs and closing down unprofitable entities.
They also have been pressing Greek politicians to unite behind the new austerity package to help ensure it sticks, and are discussing a decrease in the value-added tax as a concession to win support from the right-of-center opposition, which wants more tax relief to help the moribund economy.
A team of bankers and technical experts from the international institutions have been in Athens for close to a month, trying to find a solution to Greece’s financial condition.
Harsh austerity measures have taken a severe toll on the economy, resulting in missed financial targets and the need for more public money.
Adding to the urgency has been the persistent flow of deposits out of the banking sector. Since the crisis began, 60 billion euros in deposits have been withdrawn from Greek banks, about a quarter of the country’s output. Bankers in Athens said that outflows were particularly severe last Thursday and Friday after comments — later described as rhetorical — by a Greek politician about the possibility that Greece could stop using the euro.
With great reluctance, European governments have come to the conclusion that an additional 60 billion euros now, while politically unappealing, would be less costly than the unquantifiable public money that would be needed if a restructuring of Greece’s debt produced a contagion that spread not just to Portugal and Ireland but possibly Spain and the financial system as a whole.
But how an economy already in free fall will generate the growth to produce the needed budgetary surplus to start paying down its debt remains unanswered.
“Greece’s G.D.P. is already declining, and now the government will need to cut another 7 billion euros in spending,” said Jason Manolopoulos, who manages a hedge fund based in Athens and Geneva and is the author of “Greece’s ‘Odious’ Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community.”
“That is only going to make the debt to G.D.P. figures worse,” he said. “There is no getting around it: Greece is insolvent.”
With a debt of 150 percent of G.D.P., that may well be so. But while skeptics like Mr. Manolopoulos are keeping the cash levels in their funds high, convinced that Greece will be required to default sooner rather than later, such a sense of pressing gloom has not yet become contagious.
The big bet for Europe and the I.M.F. is whether private-sector banks can be persuaded to keep their Greek exposure. This new approach is patterned on a 2008 pact called the Vienna Initiative, in which the European Bank for Reconstruction and Development and the I.M.F. persuaded banks with exposure in Hungary, Romania and other East European countries to keep their credit lines fresh while new public sector loans were provided to these countries.
There is, however, a big difference between jawboning a regional public institution to lend more to a country in which it already has operations than persuading a risk-averse commercial bank in France, Germany or Italy to lend more to a country that it wants to permanently cut ties to.
What is more, there is a significant difference in the sums involved. A report Tuesday by the credit ratings agency Fitch suggested that the 50 billion to 60 billion euros being discussed might not be enough, and that as much as 100 billion euros in extra financing would be needed to give Greece the time and space to return to solvency.
Another crucial point is the extent to which “reform fatigue” in Greece might prevent the ambitious deficit-cutting targets from being reached. A recent survey by Kapa Research found strong support for privatization, but two other polls found support for the governing Socialists at the lowest level since 2009 elections.
Prime Minister George A. Papandreou still has a comfortable majority in Parliament, but his credibility has been damaged as the economic growth stagnates and unemployment rises.
In fact, the dynamic of protesters has changed drastically over the last several weeks. No longer is it just union leaders condemning the government’s policies, but a broader collection of people, mostly young, who have been inspired by a protest movement in Spain.
Their numbers so far have not been large, but they have been consistent — filling up the main Syntagma Square in Athens for seven days running.
“People here have lost 30 percent of their income,” said Theodore Pelagidis, an economist based in Athens and author of a recent book on the collapse of the Greek economy.
“It is nice that we are getting a loan from Angela Merkel,” Mr. Pelagidis added, referring to the German chancellor, “but I am not sure this will be enough given the depth of the recession. We are just kicking the can further down the road until the time finally comes to restructure the debt.”
Źródło: IHT June 1st 2011