Greek holders of the country’s huge sovereign debt such as banks and social security funds are “available” to participate in a rollover to reduce payments pressure, the finance minister said on Thursday.
“It is clear that there is an availability among Greek holders of Greek public debt, but also banks and social security funds, to participate in this procedure,” Finance Minister Evangelos Venizelos told a news conference.
“We encourage Greek banks to take part,” he said, adding that the process could involve bonds maturing until 2015.
“It is a completely voluntary procedure, it is not directed and it is not imposed,” Venizelos said. “Governments are not handling these issues.” And he added that the call did not just involve domestic debt holders. “This is not an initiative for Greek holders, it’s for everyone … Everybody has an interest (in participating),” he said.
“The biggest share of the debt is held by foreign institutions,” he added. Venizelos was referring to a package along the lines of a deal on Romanian debt agreed in Vienna in 2009, whereby private banks agreed to buy new government bonds to replace ones that matured.
This debt rollover idea is now gaining traction in Europe to also help Greece cope with its debt of over 350 billion euros ($504 billion). But many European officials are also wary after warnings by rating agencies that even a voluntary rollover of Greek debt could be regarded as a technical default and possibly have grave repercussions for the broader eurozone.
Venizelos was speaking after a first round of talks with top EU and IMF officials on crucial details of crash budget action to fight the debt crisis, and noted that the negotiations would continue.
“They are upstairs and they are waiting for us to return,” he said.
The EU, IMF and the European Central Bank, which are effectively keeping Greece afloat, have said they will not release the next funding tranche of 12 billion euros from a debt rescue agreed a year ago unless the latest measures are signed and sealed.
They also demand action on a 50-billion euro sale of state assets to help reduce the debt, and want to see the implementation of a five-year plan to economise an additional sum of over 28 billion euros from savings and cuts.
The minister, who assumed his duties on Friday after a broad government reshuffle, said he had to finalise measures worth around 5.5 billion euros with the so-called “troika” of creditors.
“We had to propose solutions to cover pending issues worth around 5.5 billion,” he said.
He announced an emergency contribution of five percent of income to be levied on lawmakers and other public officials, terming it a “moral responsibility” towards the Greek people after a year of sacrifices. “When measures are imposed on the Greek people, we must be the first to sustain cuts,” Venizelos said.
Many Greeks are angry at the prospect of four more years of austerity after a massive effort last year failed to meet deficit reduction targets because of a deeper-than-expected recession.
Thousands have gathered outside parliament in the past three weeks to reject the government’s policies, with many calling for the abandonment of the recovery effort under EU-IMF rules.
At stake is a new possible bailout to cover Greece’s payment needs, as continued jitters over its economic recovery have made it impossible for the government to raise new loans on the open market.
Venizelos said on Thursday that the existing EU-IMF loan, worth 110 billion euros to 2013, could “seep” into the next aid package.
But he declined to name a sum that will cover Greece’s needs for the foreseeable future. Figures talked of generally have ranged up to 100 billion euros.
A new law to put the 2011-2015 reform plan into effect will be introduced to parliament on Monday, Venizelos said.
The government has pledged to adopt the reforms by the end of the month, ahead of a eurozone ministers meeting on July 3 that is expected to determine whether Athens will be given a new bailout.
Athens, June 23, 2011 (AFP)
