Greece asks for EU-IMF financial bailout - UPDATED

Greek Prime Minister George Papandreou asked for the activation of an EU/IMF aid package.

Greece asks for EU-IMF financial bailout - UPDATED

Greek Prime Minister George Papandreou asked for the activation of an EU/IMF aid package on Friday aimed at pulling the euro zone member out of a debt crisis.

"It is a national and imperative need to officially ask our partners in the EU for the activation of the support mechanism we jointly created," Papandreou said in statements broadcast live from the remote, tiny Aegean island of Kastellorizo.

Greece is negotiating with European Union and International Monetary Fund officials the terms of a 40-45 billion euro package.

Papandreou said markets did not give Greece the time it needed to turn its economy around and spiralling lending rates were threatening to negate the effect of painful austerity measures.

"We will not allow it," he said, speaking against the backdrop of the picturesque port of Greece's easternmost island. "Our partners will decisively contribute to provide Greece the safe harbour that will allow us to rebuild our ship."

Papandreou said the EU would send markets a strong message that it can protect common interests and the common currency.

"First tranche of funds"


Greece expects to receive before May 19 the first tranche of funds under a 45 billion euro ($60.49 billion) EU/IMF aid package it has formally requested, Finance Minister George Papaconstantinou said on Friday.

"The need to have the mechanism activated emerged after developments in the last days, particularly the deficit revision by the EU and the downgrade (by Moody's)," the minister said.

"The request for aid removes uncertainty in the markets that Greece will not have funding," he said.

Greece has covered its funding needs for this month, albeit at a high cost and needs to borrow less than 10 billion euros to cover next month when an 8.5 billion euro government bond comes due.

"Greece will go out to borrow from markets when conditions are appropriate," said Papaconstantinou, who will meet with IMF chief Dominique Strauss-Kahn in Washington this weekend.

He reiterated that Greece would not be restructuring its debt.

"There is no such issue, I say it categorically, it was not discussed in the meetings we had (with EU and IMF officials)."


Agencies

Last Mod: 23 Nisan 2010, 16:37
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