U.S. urges quick movement on Greek rescue talks. Papaconstantinou held talks in Washington. Papandreou defends decision, while labor unions announces strikes.
Washington, D.C.- Greek Finance Minister George Papaconstantinou met top world finance officials on Saturday as the debt-stricken euro zone country raced to get emergency funding ahead of pressing financing deadlines. The talks, on the sidelines of annual International Monetary Fund and World Bank meetings, came a day after Greece bowed to market pressure and asked to tap a 45 billion-euro ($60.5 billion) rescue package put together by the European Union and the IMF.
Papaconstantinou met International Monetary Fund chief Dominique Strauss-Kahn and U.S. Treasury Secretary Timothy Geithner who stressed the need for a quick response to the crisis.
“Secretary Geithner encouraged them to move quickly to put in place a package of strong reforms and substantial concrete financial support,” the Treasury Department said in a statement.
Fears in the market that Greece could default and that budget problems could deepen in other euro-zone economies like Portugal and Spain, have cast a shadow over the Washington IMF meetings.
The global economy has staged an unexpectedly robust rebound in the past year which, under normal circumstances, would have been cause for celebration after nearly two years of economic crisis.
Papaconstantinou also met European Central Bank President Jean-Claude Trichet and Olli Rehn, the European Union’s Economic and Monetary Affairs Commissioner.
Rehn said on Friday that financing for Greece should be ready in early May. It would be the first financial rescue of a member of the euro zone. Time is pressing with an 8.5 billion euro bond due to mature on May 19.
EU and IMF experts are in Athens to talk about policies that would make up a rescue package.
Greece has said the European Commission could potentially offer a bridge loan to fill a gap if the aid is not approved in time to cover its funding needs.
One of the obstacles to getting aid to Greece is that any money from Germany requires parliamentary approval, a political challenge because of the strong public opposition to aid for Greece ahead of a key regional election on May 9.
German Finance Minister Wolfgang Schaeuble has invited parliamentary leaders for talks on Monday to try to speed up the process.
Greek Prime Minister George Papandreou said Saturday that an EU and IMF debt lifeline plan was “not pleasant” but vital, as calls grew in Germany for Athens to consider quitting the eurozone.
The appeal prompted pledges of swift action from the European Union and International Monetary Fund, but caused anger in Greece where there have been months of strikes and protests at harsh austerity measures.
“Because of our difficulties the European Union (experts) arrived and now the IMF is here too and they are in control, in a kind of guardianship,” Papandreou told villagers at Kremasti on the Greek island of Rhodes.
“This is not pleasant,” he said, adding that he understood posters claiming “IMF go home” and could have “co-signed” one that read “European Union, get out”.
“But they will not leave in a hail of stones, they will not leave with violence,” but only when Greece has regained its “credibility” and put its economy back on its feet, he added.
Papandreou said he was fighting to “regain our autonomy” and again blamed the previous conservative government for the debt crisis.
The Greek press on Saturday appeared resigned to having recourse to EU aid but feared a bitter pill from the IMF.
The pro-government Ta Nea branded the move “hard but necessary” but Eleftherotypia urged the Socialist government to keep Papandreou’s promises to end waste, crack down on tax fraud and speed up development projects.
EU president Herman Van Rompuy said in a statement Saturday that eurozone nations were taking the necessary steps to be able to deliver “swift assistance” to their debt-laden partner.
The 15 “other euro area member states will decide on the amount of support and conditionality,” said Van Rompuy, but have “engaged the necessary steps at national level in order to be able to deliver swift assistance to Greece.”
The IMF began its preparations several months ago as Athens found itself mired deeper in the budget crisis that has threatened to spread to the other eurozone members.
The Fund has said it will move “expeditiously” on the request, the first since the 16-member bloc was formed more than a decade ago.
George Papandreou on Friday announced that Greece is formally asking for activation of the EU support mechanism for the Greek economy.
“The time has come for the decision the leaders of the European member countries to support Greece to give us the time that the markets are not giving us. It is a national and pressing need to formally ask of our EU partners the activation of the support mechanism that we jointly created, Papandreou said in a televised statement from the island the southeastern island of Kastelorizo, where he is on a visit.
Papandreou added that he has instructed finance minister George Papaconstantinou to make the necessary actions.
The premier said that the revised figures of the true size of the Greek fiscal deficit for 2009 released on Thursday (by Eurostat) “reminded all of us of the “unfathomable mistakes, omissions and criminal choices and the storm of problems legated to us by the previous government”.
“We all — the present government and the Greek people — inherited a boat ready to sink, a country without prestige and credibility that had lost the respect of even its friends and partners, an economy exposed to the mercy of doubt and the appetites of speculation,” he said.
From the very first day the PASOK government rolled up its sleeves and went to work to reverse this negative climate, set out a plan, took tough measures that many times hurt, but regained the country’s credibility and created new alliances, Papandreou continued.
“After a veritable marathon, we sought and achieved a strong EU decision to support our country with an unprecedented, in EU history, mechanism. And we and our EU partners hoped that this decision would have been enough to calm and bring reason to the markets so that we could continue our country’s financing at lower interest rates. In other words, that the necessary calm exists so that we could devote ourselves to our task, to the great changes the country needs, to make our economy viable and competitive, for Greece to stand on its feet and for the Greek people to feel pride,” the premier said.
“The markets did not respond,” he added, “either because they did not believe in the EU’s determination, or because some sides decided to carry on with the speculation”.
“Today, the situation on the markets threatens to deconstruct not only the sacrifices of the Greek people, but also the economy’s smooth course, and the effort being made by the Greeks is at risk of being lost due to the even bigger lending interest rates and, even worse, by the difficulty in borrowing,” he continued.
“We will not allow this,” the prime minister stressed. “The time has come for the decision the leaders of the European member countries to support Greece to give us the time that the markets are not giving us.”
“It is a national and pressing need to formally ask our EU partners for the activation of the support mechanism that we jointly created in the EU. I have already instructed the finance minister to take the necessary actions,” Papandreou said, adding that “our partners will contribute immediately and decisively to give Greece the sheltered harbor that will enable us to rebuild our boat with sturdy and reliable materials, but also to send a strong message to the markets that the EU is dead serious and protects our common interest and our common currency”.
“We are on a tough course, a new Odyssey for Hellenism. But we now know the way to Ithaca and have chartered the waters. We have before us a journey that is demanding for all of us, but with a new collective conscience and common effort we will reach there safely, for confident, fairer, prouder. Our final goal, our final destination, is to liberate Greece from surveillance and guardianship, to liberate the forces of Hellenism, every Greek, of perceptions, practices and systems that have been hindering them everywhere for decades, to give oxygen where there is asphyxiation, justice and rules where there is injustice, transparency where there is darkness, certainty where there is insecurity, and development for all,” Papandreou continued.
“Our inspiration, our faith, is this land, from Kastellorizo to Corfu, from Crete to Evros. It is this wonderful people, it is our youth, with their abilities and visions. I am absolutely convinced that we will succeed. Provided that we Greeks believe in our abilities, our values, our very selves,” the prime minister concluded.