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Conditions for the second resque package are being changed

24 September 2011 / 19:09:36  GRReporter
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German Finance Minister Wolfgang Schäuble left open the possibility to review decisions about Greece which were made on July 21st, and along with that rejected any discussion of the issue about the likelihood of bankruptcy of the country.

In a statement from Washington Wolfgang Schäuble explained that the terms for the second rescue package may have to be changed based on the last report of the Troika, which may reveal new data when published.

"We need to reassess whether the second package agreed upon in July, is correct or not, based on recent events", he added, pointing also the additional austerity measures imposed by Athens.

Meanwhile, Minister Schäuble urged Athens to meet the conditions set for it to be paid the next tranche, and stressed however that it is not necessary to review the conditions for granting of the next tranche.

"It is clear that the obligations must be met, it makes no sense to make assumptions about the next steps", he said, adding that European finance ministers will discuss the situation with the banks in early October as the recapitalization is not the business of theEuropean Central Bank but of the Member States.

At the same time a document of the European Union, which made its way to the credit rating agency Bloomberg, indicates that the redemption of the Greek debt as provided in the second package of aid to Greece, will be open to all investors and for all Greek government bonds.

It is also indicated that the procedure should be performed simultaneously with the program for the exchange of bonds, so as to minimize the period of time during which the rating agencies will keep Greece in the regime "selective default".

Another confidential EU document reveals that European governments are investigating the possibility of activating the permanent support mechanism ESM starting with July 2012, one year earlier than planned.

The need to implement the decisions from 21st of July noted also the European Commissioner for Economic Affairs Commissioner Olli Rehn, and he also mentioned that Member States are working tirelessly to find a solution, and expressed his confidence that the crisis will eventually be overcome.

Meanwhile, German Chancellor Angela Merkel stated from Germany that the problems of the euro should be resolved from the root and urged Greece to complete what has been requested from it. "A bankruptcy of Greece for me is not an option, it is impossible to predict the damages coming from such developments. A failure of Greece would lead to an uncontrolled domino" said Merkel.

Furthermore, as a  response to the proposal of the Deputy President of the European Commission Viviane Reding regarding the Eurobonds of the six eurozone countries with the highest credit rating, the German chancellor reiterated her opposition to the general Eurobonds and stressed that this plan would lead the Eurozone to irresponsibility.

In an interview with the German newspaper Reding proposed the merger of the bond markets of Germany, France, Luxembourg, Austria, Netherlands and Finland, which have the highest rating ΑΑΑ, in order to create a unified European bond market with high liquidity and high solvency .

The leader of the International Monetary Fund said Christine Lagarde spoke also of the coordination of the market for government bonds both by the European Central Bank and by the European Financial Stability Fund (EFSF).

"Personally, I wonder whether it would be possible for a market for government debt to be coordinated by the European Central Bank and ΕFSF», explained Christine Lagarde in her statement from Washington yesterday.

Nevertheless, the leader of the Dutch Central Bank and a board member of the board of directors of the European Central Bank Klaas Knot did not exclude the possibility of bankruptcy of Greece and thus became the first representative of the central bank in the eurozone, who made a similar warning - and added that the funds of the ΕFSF should increase to over 1 trillion. Euro.

Finally, the Leader of the Working Group of the European Union Horst Reichenbach said in an interview before the newspaper "Handelsblatt", that a serious problem to Greece is the inconsistency in payments.

Statements from Moscow

Russian Prime Minister Vladimir Putin sharply criticized yesterday the EU countries that want economic assistance from Germany and France, and said that thus they replace their national sovereignty for charity.

"You can go out on the streets to protest, to fight the police, but if the government has no money at all, you can not just sit there with your hand out," said Putin.

Message for unity to the markets from the G20

A message of unity sent to the markets, the finance ministers of the 20 largest economies in the world (G20), with the commitment to overcome the dangers that threaten world economy and to prevent the spread of the European debt crisis towards the banks and financial markets, by emphasizing however, on the need to strengthen the European Financial Stability Fund (EFSF).

Under the pressure from the investors for decisive and coordinated action the finance ministers and bankers from the G20 said that they would take all necessary measures to calm down the global financial system.

"We commit ourselves to undertake the necessary actions in order to preserve stability of the banking system and the financial markets", says the joint communique of the G20, within the meetings of the World Bank and the International Monetary Fund in Washington.

Tags: debt crisis bankruptcy International Monetary Fund European Financial Stability Fund EFSF
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