Bloomberg News

Greece Has Cash to Meet Needs Until Mid-November, Venizelos Says

October 04, 2011

(For more on the euro crisis, click on EXT4 <GO>)

Oct. 4 (Bloomberg) -- Finance Minister Evangelos Venizelos said Greece has enough cash to operate until mid-November, after euro-region finance ministers delayed a decision on the nation’s next emergency-loan payment.

With cash needs covered until then, Greece has time to carry out reforms demanded in return for a new bailout plan, Venizelos told reporters in Athens today after returning from the ministers’ meeting in Luxembourg. The new package “will give a more radical and more complete answer to our problems,” Venizelos said.

The ministers, who yesterday discussed re-crafting a July deal on private-investor participation in a new Greek rescue, pushed back a decision on the release of the country’s next 8 billion-euro ($10.6 billion) loan installment until after Oct. 13. It was the second postponement of a vote originally slated for yesterday as part of the 110 billion-euro lifeline granted to Greece last year. The decision on the payment may come at an Oct. 17-18 European summit.

“In reality, the issue is not the disbursement of the sixth tranche, it is to convince the markets that here we have an overall sustainable solution” based on the July 21 accord on a second bailout worth 109 billion euros, Venizelos said today.

Greece faces a “critical” final quarter of the year to meet its targeted budget deficit of 8.5 percent of economic output, a goal included in the 2012 budget submitted to Parliament for approval before the end of the month, the finance minister said.

Possible Slippage

He said the budget, which was approved by inspectors from the European Union, the International Monetary Fund and the European Central Bank, allows for the deficit to slip to 9 percent if the target is missed, with the difference to be covered in 2012.

“There’s no need for additional measures as long as we are all consistent and organized,” Venizelos said. “If the government mechanisms don’t work, then obviously we may have problems achieving the real goal.”

Yesterday’s meeting did not discuss a Greek default or exit from the euro, Venizelos said, adding that the talks focused on the implementation of austerity measures and structural reforms.

Responses to a letter of inquiry to bondholders regarding a planned voluntary debt swap were being assessed and the terms of the July plan for the swap are being examined, he added.

The Luxembourg meeting also reached an agreement on demands by Finland for collateral in exchange for its participation in the second Greek bailout. The accord involves Greece issuing 880 million euros of bonds to Greek banks, which will provide securities for use as collateral, the finance minister said.

--With assistance from Maria Petrakis, Natalie Weeks and Eleni Chrepa in Athens. Editors: Jeffrey Donovan, James Hertling

To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net; Christos Ziotis in Athens at cziotis@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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