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Angela Merkel: Good job regarding the emergency measures in Greece, but there will be no financial aid

04 March 2010 / 14:03:30  GRReporter
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The European partners of Greece are satisfied with the adoption of the new measures. "The restrictions introduced by the government are an important step towards realizing the objective of reducing the public deficit with 4 percent of GDP by the end of this year," said Germany's Chancellor Angela Merkel. However, the Chancellor strongly stressed that Germany is not prepared to consider granting economic aid to Greece. "The meeting with PM Georgios Papandreou scheduled for Friday fifth of March," said Angela Merkel, “is to strengthen the good relations between the two countries, rather than the allocation of resources." 

"The new measures are of utmost importance and are fully adequate to the end of 2010. However, Greece should be ready for further action in 2011 and 2012," said commissioner for economic affairs in the European Union, Olli Rehn. He announced that if necessary, the Eurozone would be prepared to support the country on the road to financial recovery without giving any specific outlines of this assistance. 

The lack of clear financial support so far by the member countries in the euro zone, strengthens the speculation that Greece may have seek for help by the International Monetary Fund (IMF). The Prime Minister has left himself the possibility to seek assistance from the IMF, if the spread index of the ten-year government bonds does not fall significantly until May (when Greece has to borrow €23 billion). For its part, the Fund welcomed the actions of the Greek government and finds the new measures essential and crucial to the recovery of the European economy. "The implementation of this package of fiscal measures is a turning point in a long process," said IMF spokesman Caroline Atkinson. She stressed that the Fund stands ready to provide assistance to the Greek officials to achieve the set goals - reducing the public deficit below 3% of GDP and strengthening the local economy. 

Positive responses were received from the European Central Bank as well. "The introduction of the additional measures shows strong commitment of the Greek government to achieve its financial targets included in the stability and development program," says board member of the ECB Jϋrgen Stark. According to him the reforms in the country will enable the Greek economy to overcome many existing problems in the system and to start taking the path of sustainable growth. 

The new emergency measures of the PASOK government provoked immediate reactions both outside and inside the borders of Greece. While abroad, increasing the VAT and cuts in wages of public employees was accepted with joy, within Greece starting is a dangerous wave of discontent. Eleven opposition organizations from the extreme Left in the country announced a general protest against Papandreou’s reform under the slogan "This policy cannot be repaired, it should be removed!” 

Photo: Reuters

Tags: Economy of Greece Olli Rehn Juergen Stark European Central Bank Angela Merkel measures
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