Athens, Greece - Greece prepares to receive the next opus of its rescue facility and will probably get more rescue ready to prevent it from defaulting on its massive debts, European officials said Friday.
The inspectors of the debt of the European Union and the Monetary Fund International said that Greece should receive the next tranche euro12 of its bailout billion billion European existing until additional austerity and privatization measures are deemed sufficient. The Greece also had to accept external interference without precedent in the way it runs its Government services.
As the inspectors of the international debt held the long month mission near Athens, Jean-Claude Juncker, who chairs the Group of 17 Ministers of finance in the euro area, said he only expected the Greece for additional help, at the top of the existing loans of rescue, as long as it fulfils its promises.
"I expect the Eurogroup agree on additional funding to be provided in Greece, under course strict conditionality," Jean-Claude Juncker, the head of the 17 of Finance Ministers of the euro zone, said at the Luxembourg following a meeting with Greek Prime Minister George Papandreou.
Basically, Juncker also announced that the private creditors such as banks and investment funds will be requested to share a little of the load to the Greece more time to put its economy on track - an idea which has faced many criticisms of the European Central Bank, which fears it could cause panic in financial markets.
"This conditionality will include the participation of the private sector on a voluntary basis and the involvement of the private sector will have to be negotiated with private creditors," said Juncker. He later said the Associated Press that the euro zone countries had not yet decided what will look like this involvement in the practice.
In recent weeks, representatives of the ministries of finance in the euro area discussed several options for involvement of the private creditors, including asking them of Greece to give time to repay the bonds they hold or commit to buy new as old expire. However, they have ruled out requiring private investors to accept to be paid unless they are due.
Juncker spoke after the European Union, European Central Bank and the IMF, collectively referred to as the troika, was given the Greece more space to breathe that he tries to service the debt.
The slice billions of euro12, which will be likely paid in early July after approval of the Board of Directors of the IMF and the Eurogroup, said the troika, depends on the recent assessment of the debt. Without funds, Greece default face.
"Overall, important, particularly in the area of budgetary consolidation, progress in the first year of the adjustment programme," the three institutions said.
They also said that they expected the Greek economy to stabilize early in the year. This is important because the burden of debt in proportion to the country's GDP continues to rise if the economy is shrinking as it has been for much of the past three years.
The dominant view in the markets was that the Greece, which is actually locked fundraising, by the sale of bonds because of the prohibitive interest rates would need another plan rescue to plug a potential funding gap of euro60-70 billion over the next two years.
Negotiations with Athens debt inspectors dealt with both the steps that Greece had taken to reform its economy in line with the rescue plan and a programme of additional measures for the years 2012-2015.
Accelerate privatization euro50 billion which aims to raise funds for the country short of money, other measures to be taken this year to achieve the objectives of reducing deficits and structural reforms of the Greek economy were also discussed, the Ministry of finance, said, adding that the talks had concluded "positive."
In exchange for funding ongoing, so-called "monitoring mechanisms" will ensure Greece implements structural reforms already underway, including medical care and the labour market. A new "Managed independently privatization agency" will also be put in place for the sale of State assets. The privatisation programme will meet on a quarterly basis and be subject to annual targets, said the troika.
Greece seeks to reduce its deficit to 7.5% of GDP at the end of this year, from 10.5% in 2010. To achieve this goal, Finance Minister George Papaconstantinou last month announced corrective austerity measures worth about euro6.4 billion for 2011.
Rises the fresh tax and budgetary expenditures are to be finalised "in the coming days" and will be submitted to the Parliament after approval by the Cabinet, the Ministry said. The troika said that they will include a "a reduction of employment in the public sector, (and)"restructuring."."the closure of public entities or
Austerity measures already taken - and the prospect of more to come - caused frequent protests and strikes, with several appellant to another general strike across the country. Thousands of people gather in main square Syntagma capital for the 10th night after a call for peaceful gatherings was launched on social networking sites.
Opposition parties angrily denounce the new emerging agreement as a recipe for a greater difficulties for the Greeks.
"This gives a dose higher than bad medicine," conservative party spokesman Yiannis Michelakis said.
Several thousand demonstrators of a union-backed Communists across the Centre of Athens, while about 200 Union even took the Ministry of Finance building earlier in the day. They have hung a massive banner, with five storeys of the building and blocked the entrance to the Ministry before dawn.
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Steinhauser reported Luxembourg.
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