Banks closer to deal on Greek bailout

5:03 PM bailout, Banks, closer, Greek No Comments

Athens/FRANKFURT – banks and policy makers was nearing a deal to help a parliamentary vote on strict, who must win Greek Prime Minister George Papandreou, standard avert next week to secure funds prior to the Athens on Friday.

Despite the rejection by the conservative opposition agreed the plan again with international lenders and signs of a revolt in his own Socialist Party, Papandreou said he was confident, would pass the deeply unpopular package of spending cuts, tax increases and privatization.

"It is a moment of historical significance." "Bad things, perhaps even insolvency, will come when everyone resists", Papandreou told a press conference on the sidelines of the Summit of the leaders of the European Union in Brussels.

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The meeting saw the euro zone Governments to discuss a new rescue package for Greece, the up to EUR 30 billion from the private sector to help Greece enormous public debt cutting could include,.

President Nicolas Sarkozy said French banks agreed voluntary rollover of Greek debt to participate in one, Spain's Jose Luis Rodriguez Zapatero said Spanish banks agreed on a scheme to buy Athens more time, while Berlin, German banks asked their intentions indicate next week to participate.

"We had many meetings with the banks and insurance companies." French President Nicolas Sarkozy, there are no difficulties, "told reporters after the meeting."

However, no new money will flow if the Greek Government shall adopt deep cuts and markets remain skeptical. Euro fell heavily in doubts that he would vote against the Government will win the day after an outsider ruling party member said.

"It's very ugly;" a complete chaos, ", said a trader in London. "There's a rumor that passed the strict not."

After a difficult series of meeting this week thrashed new Greek Finance Minister Evangelos Venizelos from an agreement with inspectors from the EU and the International Monetary Fund on Thursday, the funds needed immediately Greece.

But if the vote next week lost, international lenders financing which means that the Government money be executed within days unlikely want to share a 12 billion tranche.

Greece a package of EUR 110 billion EU/IMF loans in May 2010 accepted but now needs a second rescue mission of similar in size to the end of 2014, to fulfil their financial obligations if it hopes, again on capital markets for financing.

Binding commitments, through assessed Athens the painful measures needed, will push to get smashed public finances back in order want to international lenders.

The Government won a vote of confidence this week with 155 of 300 votes in the Parliament, showing how closely the June 29 vote on its could be austerity package.

In the sign of uncertainty to the vote, which is accompanied two days by a general strike, a Deputy of the ruling PASOK party said, that he opposed to the mix of higher taxes, spending cuts and state sales.

"Shops are shut down every day and we take anti-growth measures" party Maverick Thomas Robopoulos, a car dealer from Greece's second largest city, Thessaloniki, and one of a few entrepreneurs in the Parliament of the Reuters news agency. "I would like to speak in Parliament and try to do them to convince something."

Daily protests in Athens and other cities and an opinion poll on Friday put the conservative opposition Greece 2.1 points ahead of PASOK and showed three quarters of the Greeks against the raft of tax hikes and spending cuts, which they will be hit hard.

Greece partners have expressed growing impatience with what they face as a refusal, the seriousness of the situation. The attitude of the conservative opposition, who said that it will oppose parts of the package, has in particular European Heads of State and angry Government.

"I made it very clear that for the acceptance and the stability of Greece, it would be highly desirable, the opposition for this package of votes" said German Chancellor Angela Merkel in Brussels.

Retrieving banks on board
As well as participation of the private sector in a new rescue applies reform commitments from Greece to meet objections by many Governments as an essential element to European taxpayers the cost of storing bank balance sheets.

But it's complicated was by the fact that each schema must be voluntary, otherwise it risks defaults by credit rating agencies is binned, or at least a "credit event" could have serious consequences for the financial markets.

Banking sources told of Reuters that European banking and finance discussed officials a proposal to the existing Greek debt by another type of bond to replace ratings reservations.

The proposal is for a voluntary rollover of debt securities with a different and agencies to avoid move not comparable loan composition of Greece in default state.

"I want to comment on the current state of these discussions, I think, it is for us to have these conversations first and then reports you the results", said Merkel. "I don't think it would be wise to enter all the numbers." We have no hard figures yet.

Papandreou promised at the EU Summit in Brussels, radical economic reforms prevail, after Venizelos secured with EU and IMF inspectors to additional tax rises and spending cuts to a financing agreed gap within a five year strict 3.8 billion euro plug in the value of EUR 28.4 billion plan.

On Thursday, Venizelos announced additional measures, including extra spending cuts, lowering the threshold minimum income tax and measures for the introduction of a special "solidarity levy,', the ordinary Greeks are hit even harder.

Employees at Greece dominant power generating PPC that privatization next year is planned, were in parallel 48-hour strike for a fifth day on Friday. The Union opposes sale 17 percent in the firm plans and said that the work action will lead to power outages.

"Many of the change of the guard at the Ministry of Finance of the low income groups and those who consistently pay their taxes would have helped thought", ethnos said a middle links daily, which usually is supportive of the Government. "Unfortunately those hopes were dashed."

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