Germany calls for Greek bond swap save time (AP)

By DAVID McHUGH and GABRIELE STEINHAUSER, AP Business writers David Mchugh and Gabriele Steinhauser, Ap Business writers - Wed Jun 8, 4: 34 pm EST

Frankfurt, Germany - Minister of Finance of the Germany, said the private creditors must share the burden of any financial assistance more high for the Greece under an agreement to prevent, by default on its debts.

In a letter to officials dealing with the debt crisis and obtained by the Associated Press Wednesday, Wolfgang Sch?uble suggested an Exchange that extend repayments of the debt by seven years and Athens to give time to reform its economy.

Such an approach has already been strongly opposed by the ECB in the field, that it could spread unrest through the financial system of the continent, then the ratings agencies have warned, it could be considered as a defect.

In the letter of Mr. Jean-Claude Trichet, the President of the European Central Bank, the Monetary Fund interim management International Director John Lipsky and other finance officials, said bond - so far spared losses that the countries of the euro area were rescue of Greece, the Ireland and Portugal - should be a "substantial and quantified contribution" for the new aid package reviewed by the Governments of the euro and the Monetary Fund International.

The best way to do that, it was said, was to swap the existing Greek bonds for new bonds which could extend their maturity in seven years. Sch?uble is one of the Finance Ministers of the euro area trying to find an agreement on a new package of aid for the Greece in time for the next formal meeting on 20 June.

He said that expect the Greece need for a "substantial" increase in aid.

"At the same time without another disbursement of the funds before July, we face the real risk of the first default unorderly in the euro area," it said.

In the letter, said any deal June 20 "" must include a clear mandate - to Greece, possibly with the IMF - to begin the process to involve Greek bonds holders.""

"Such a result can best be achieved through an exchange of link leading to an extension of Greek sovereign bonds in circulation by seven years, at the same time giving Greece the time needed to fully implement the necessary reforms and regain the confidence of the markets," said.

The idea may face the opposition of the ECB, which has flatly opposed any restructuring of the Greek debt that would bond with less than full value. ECB officials said that such an approach would be inflict losses on the unstable Greek banks which the Government can afford sick bail and could make it more difficult for other countries to borrow money on the bond market because investors would fear the possibility that similar measures.

The ECB has even threatened to ban the use of the obligations of the Greek Government as collateral for Central Bank credit to Greece does what he considers a restructuring of its debt. Rock, which would be the Greek banking system, which is based on the support of the ECB, because banks can not find credit elsewhere.

The Greece received a package of international rescue (161 billion dollars) last year European billion, but is still the difficulty come with money to pay its debts, as it is considered too risky to borrow on the private bond markets.

The risk of Greece running money next year, as banks and investment funds reluctant to buy bonds of the country, which remains stuck in recession and is struggling to reduce its large budget deficit. Some rich nations are opposed to put more money without obtaining the private creditors share the part of the load.

A spokesman of Monetary Affairs Commissioner Olli Rehn of the Union - one of the recipients of the letter - said Wednesday that no decision on the exact nature of the participation of the private sector has been made, but that officials of the euro area are currently seeking a several options, including asking banks and other financial institutions to keep their loans in Greece at its current level or to extend the deadlines for repayment for bonds that they hold.

___

Steinhauser contributed Brussels

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Greek reform efforts reached the critical stage (AP)

By GABRIELE STEINHAUSER and ELENA BECATOROS Associated Press Gabriele Steinhauser and Elena Becatoros Associated Press - 11 minutes ago

Athens, Greece - the Greece struggle to implement the new of austerity and avoid default installs in a critical phase Thursday as Prime Minister George Papandreou pressed his Cabinet for approval and international creditors chided the country for its lax efforts.

The new measures - budget cuts and a liquidation of the assets of the State in businesses and real estate - are a prerequisite for the Greece receive the next part of its rescue (161 billion dollars) European billion plan granted a year ago.

Without the payment of the Greece billion euro12, which remains mired in recession and locked out on international bond default on its massive debts.

Papandreou and his ministers were the subject of intense criticism of their own members of the Socialist Party in a series of meetings of marathon on the plans. They include a repair euro6.4 billion ($9.4 billion) package of cuts and hikes tax for this year, a reader of austerity renewed for 2012-2015 and a programme of privatisation ($73 billion) euro50 billion.

Pressure on Papandreou and his Government is more important than ever, with international creditors of the country claim a cross-party support for the rescue package and to openly criticize the slow pace of reforms.

"After a fort in the summer 2010, came under the reform implementation to a standstill in recent quarters,"the European Union, the European Central Bank and Monetary Fund International wrote in a summary of their recent evaluation of the efforts of the Greece."." The Associated Press obtained a copy Thursday.

The three institutions, known as the troika, also cited "political risks" to the implementation of the programme of privatization in their conclusions, which were distributed between the Finance Ministers of the euro on Wednesday and budget cuts.

"Those doubts on the ability and the willingness of the company and the Greek Government to persevere in fiscal consolidation and restoration of competitiveness" are the main likely reason for the Greece will be not able to access new financial markets, leading to serious deficiencies in funding next year, the troika concluded.

While the General problems with the bailout of the Greece are known for some time, the summary of the report of the troika is much more critical than the prior statements.

The report also details some of the additional expenditure reduction measures the Greek Government plans to take over the coming year. To meet the objectives set out in the programme, the Government has to make budget cuts and other measures worth approximately 10 per cent of the production between 2011 and 2014, said of the troika.

Among those who are wage and job cuts in the public sector, a reduction in administrative and defence spending, savings in State enterprises, expenditure on health, pensions and disability services, said the report. Only 1 in 10 vacant posts in the public sector will be completed this year, and only one in five will be completed until 2015.

The Government also plans to raise taxes on fuel, property, beverages and tobacco, as well as restaurants and bars.

Some of the additional reductions are needed because the economy of the Greece did worse than expected, when the rescue plan was announced last.

In the first quarter, the gross domestic product of the Greece reduced 5.5% a year earlier, the national statistics Office said Thursday. The troika expected now of economy of the Greece to shrink by 3.8% in 2011, worse than the percentage of 3.5 abandon EU does predict that in May.

Without additional measures this year, the Greece budget deficit would remain more than 10% of economic output, the troika stated, the way off the coast of the 7.5 per cent target set out in the programme and also the prediction of 9.5% by the European Union last month.

The shrinkage of the economy has not only led to holes in the revenues of the Government, but has also caused difficulties for citizens.

Greek State-run enterprises workers walked off work Thursday to protest against the privatization of the Government plan because they fear that will lead to more jobs and salary reductions.

Under the slogan "we do not sell", they pass through the Centre of Athens.

Public transport workers walked off the coast of employment in the early morning and the end of the evening, then that port workers, post offices and banks called for a 24-hour strike. Television station technicians were also on strike, as were journalists in the diffuser of State-run, disrupting programing news live. A general strike was called for June 15.

Angry Greeks resumed the central Syntagma Square, establishment of a city attempts a sit-in. tens of thousands of people inhabited the square, which is located in front of the Parliament, last Sunday.

____

Contributed by Derek Gatopoulos in Athens and Juergen Baetz in Berlin. Steinhauser contributed Berlin.

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Obama urged to make difficult decisions on the crisis of Greek debt (Reuters)

WASHINGTON/Athens (Reuters) - President Barack Obama Tuesday urged the countries of the euro area and the holders of bonds to make difficult decisions to contain the Greece debt crisis while International Monetary Fund said more work was needed to Athens receive his next block of rescue aid.

Obama, appearing at a joint with Chancellor press conference Germany Angela Merkel, said the United States would be favourable, but put the onus for action on Europe and the Germany called a "key leader" to resolve the crisis.

The Greece debt levels "means that the other countries of the euro area will have to provide them with a net and support", said Obama. "And frankly, people who hold Greek debt will have to make decisions, in cooperation with European countries in the euro area, on the way in which the debt is managed."

Obama and Angela Merkel, said that they at length the crisis of the Greek debt during the official visit of the German leader to Washington.

Plans are in form for a second Greece international rescue plan, with a three-year package, a value of the set of 80-100 billion euros to be ready in the next two weeks, official sources said euro area.

The plan aims to avoid a costly failure and restructuring of the Greece 340 billion euros ($499 billion) of sovereign debt, but some European politicians require that holders of bonds share part of the burden of keeping the solvent Greece.

Obama is committed to cooperate with Europe and the IMF on solutions which also give the Greece a chance to grow its economy and suggested that a Greek default could send shock waves that could damage economic recovery in the United States which showed signs of faltering.

"We believe that economic growth in America depends on the sensitive resolution of this issue." "We believe that it would be disastrous for us to see a default and uncontrolled spiral in Europe, because that could trigger a wide range of other events," said Obama.

Angela Merkel, who is under political pressure at home to avoid to be Savior to European countries who have financial difficulties, said that Germany's central role.

"We have seen that the stability of the euro as a whole is also affected if a country is in danger," she said.

"If we see clear European responsibility and we will assume this responsibility, in collaboration with the IMF."

NO NEED TO WORK

In Athens, a senior Greek official said Parliament Government planned to vote at the end of June its plan in the medium term of austerity, a condition for the new package as Athens struggles to avoid default on its debt.

But Bob Traa, senior representative of the Monetary Fund International Greece, said that the European Union needs to do more work before the Board of Trustees of the Fund could release more loans.

"I think there is a Summit in Europe, in June, where a few hard nut to be cracked.". They need to make decisions, and then go us to our Board and pay in early July, "he said at a banking Conference.

A team of IMF, the EU and the European Central Bank concluded an agreement Friday under which Athens impose more austerity and more rapid privatization to reduce its budget deficit.

The Greece has accepted a 110 billion euro ($160 billion) bailout with the EU and the IMF a year ago. But this implies that Athens could resume loans on the market early in 2012, which is not currently possible as yields on Greek debt are sky high in the secondary market.

Details of the new deal to replace the May 2010 rescue must still be resolved, but it involves the financing needs Greece is covered by a mixture of new EU loans and the IMF, deficit compressions, including increases in taxes and asset sales and a "voluntary" participation by the private creditors.

It is possible that creditors agree to buy new Greek bonds when the obligations that they are currently taking into mature, meaning Athens would step find cash for reimbursement.

Slovakia said on Tuesday that he would not approve new aid for the Greece unless private investors bore part of the burden.

But the rating agency Moody said that it is difficult to see how a reversal of the private sector of Greek debt could be truly voluntary, and that such an approach would therefore be likely event of credit - a decision which would have an impact on the market a large scope as places paid financial instruments used to take out insurance against failure to trigger.

Bart Oosterveld, Director General of Moody's sovereign risk group, "it is hard to imagine, in the current circumstances, that people would voluntarily do this", said to journalists in Paris. "Our definition by default provides that, if something is voluntary, it must be truly voluntary..." Most likely not that would be a credit in our event. ?

Traa the IMF has warned that a major restructuring of Greek debt would create incalculable problems in the euro area but indicated that the Fund was open to other solutions.

"Extending the terms of payment, for example loans of partners in the euro zone and the IMF, is a reasonable thing to believe because we have right of depreciation at the end of the program.". "It is a technical issue, that we can think," he said.

($ 1 =. (Euro 6845)

(Other reports by Andreas Rinke, Lefteris Papadimas Ingrid Melander, George Georgiopoulos and Renee Maltezou; writing by David Lawder and David Stamp;) (Editing by Eric Walsh)

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France arguably Greek rollover if no credit event (Reuters)

PARIS (Reuters) - France could return a reversal of the private sector of Greek debt as part of a new EU-IMF rescue plan, if it can find a voluntary formula to avoid more damage in the euro area markets say sources familiar with the thinking of Government.

Euro-zone Governments have edged closer to a compromise this week on a second Greek rescue program, with an increase in official financing, whereby private creditors would be called upon to share their sovereign debt obligations more updated.

President Nicolas Sarkozy softened opposition total earlier Paris to any form of restructuring, saying after the G8 Summit, in Deauville on 27 May that he was different from the restructuring of the search for ways for private investors to share the burden of debt.

French sources said that he wanted to help the German Chancellor Angela Merkel, who has need to appease public anger on the signing of another cheque for the Greece showing that the private sector is sharing the risk.

But France, partner of Berlin in the leaders of the European institutions, has quietly reacted to the proposal of the Minister of German finance Wolfgang Sch?uble of an exchange of Greek debt to extend the deadlines in 7 years and call for a "significant contribution" from creditors.

"The French line has always been to deny the restructuring of the debt of the Greece... regardless of what conditions are proposed," Budget Minister Fran?ois Baroin said Wednesday.

In private and public sector, sources said that Paris was trying to temper the line more lasts from Berlin on the participation of the private sector, a Summit of the leaders of the European Union of 23-24 June, which should accept a new package for the Greece.

Sarkozy can fly in Germany to meet Angela Merkel at the end of next week, a French official source told Reuters.

The sources all spoke on condition of anonymity because of the sensitivity of negotiations.

Officials say that France is resolutely opposed to any move that would constitute a "credit event" in the eyes of investors, triggering payment of Credit Default Swaps used to ensure debt and sending shock waves through the financial system of Europe.

The body of the ISDA derivatives industry, who has the last word or a credit event has occurred, said a voluntary agreement to roll over Greek debt holdings would not usually trigger payment of SADC.

However, credit rating agencies said that they would be likely to classify a turnaround as an exchange of debt distress and downgrade selective rating of the Greece 'default '. Which could affect the European Central Bank's willingness to accept debt Greek as collateral in its liquidity operations.

"There are a number of options on a table and negotiations are not over yet, said a source in contact with the Ministry of finance." A Greek debt rescheduling normally trigger a default value, then that would not be a rollover. ?

NOT QUITE VOLUNTARY

The French are determined to avoid any action which could damage not only creditors of Greece, its financial sector and the economy, but also have an impact on the solvency of the Ireland and the Portugal and other euro-zone countries under stress.

As an alternative to an exchange of debt, French sources said that banks could be persuaded to enter into a voluntary agreement to refinance their Greek debt as it comes of age. However, this would mean official creditors pay more the second rescue plan.

After the Germans, the French banks are second largest foreign holders of Greek debt. BIS figures published this week showed that at the end of 2010, German banks 23 billion euros in Greek bonds and the French banks 15 billion euros.

The ECB President, Jean-Claude Trichet, former Director of the Council of the French Treasury, appeared to open the door to a reversal earlier this week by saying that he would accept a regime in which banks were invited to voluntarily maintain their level of exposure to the Greece.

But he restricted any such scope Thursday by saying that the ECB wanted to avoid "any event credit and selective default."

To encourage banks to buy the new bonds more long term, the ECB could accept as guarantee, while the former ones could gradually cease to be accepted.

"The is can we try to convince the agencies rating and the agreement to avoid triggering a credit event, the packaging", said the source in contact with the Ministry of finance.

Bart Oosterveld, head of sovereign risk of Moody group, said on a trip to Paris this week that it is difficult to see how such an agreement would be truly voluntary, given the vagaries of 340 billion euros from the Greek debt. If there was a suggestion of coercion probably would cause a failure, he said.

Jean-Paul Chifflet, CEO of heavyweight French bank Credit Agricole, among the most exposed in Europe in the Greece, said on Wednesday, he was reportedly favour an extension of the deadlines of the sovereign debt of the Greece.

Another senior banker, speaking on condition of anonymity, said French banks had already given the Government committed last year, when the first Greek bailout, to maintain their exposure to the Greece.

"We have been invited to a meeting with Christine Lagarde and it very clearly that it was expecting the French banks after the Government had to support them in these critical times in 2008-2009, to play the game on the Greece" said.

"It was not voluntary," he said, adding that German banks had made a similar commitment.

(Reported by Paul Taylor, Yann Le Guernigou and Emmanuel Jarry; additional editing by Paul Taylor)

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Eyes of Europe role of the private sector in Greek debt deal (Reuters)

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BERLIN (Reuters) - The euro zone edged closer on Wednesday to a compromise on a second Greek bailout package under which private creditors would be asked to swap their sovereign debt holdings for bonds with longer maturities.

Several euro zone bankers, including the head of French heavyweight Credit Agricole (CAGR.)(PA), said they would support a maturity extension, a move that would not reduce Greece's massive debt burden purpose could buy it more time to meet its fiscal targets and avoid a harsher restructuring.

The European Central Bank, which has argued loudly against any form of debt restructuring, may also be warming to the idea of private sector involvement if a cut in the main of Greece's debt - a "haircut" - can be avoided.

Greece sealed a 110 billion euro aid-for-austerity deal a year ago but has failed to restore confidence in its finance and a new package is in the works which could total 80-100 billion euros to cover Athens' funding needs through 2014.

German Finance Minister Wolfgang Schaeuble told coalition members of parliament that Greece needed an additional 90 billion euros in its second rescue package that would get the country through 2014, a coalition source told Reuters.

An EU/IMF report on Greece's fiscal progress which was obtained by Reuters on Wednesday underscored the depth of the country's woes. The "troika" of institutions, which includes the European Commission and the ECB slashed its forecasts for the Greek economy, forecasting a contraction of 3.8 percent this year and meager growth of 0.6 percent in 2012.

"After a strong start in the summer of 2010, reform implementation came to a standstill in recent quarters," the report said, warning of political implementation risks.

"A reinvigoration is necessary to prevent the fiscal deficit from getting entrenched at unsustainable levels, but also to reach a critical mass of structural reforms which will support the recovery."

"SUBSTANTIAL CONTRIBUTION"

European economic and monetary affairs commissioner Olli Rehn told reporters in Koenigstein that the euro zone held a teleconference on the Greek situation on Wednesday evening.

"It was underlined that it is essential that Greece meets its fiscal targets for this year with concrete measures that have been agreed..." Greece is now committed to meeting targets. "it has specified concrete measures," he said and added extending debt maturities was part of the discussion.

Rehn, speaking on the sidelines of Financial Times Deutschland Banking Day, also said the euro zone must avoid triggering a so-called credit event as it hammers out a new deal on Greek debt.

"We have been discussing a Vienna style initiative and in that context we have also examined the feasibility of a voluntary debt rescheduling or variety on the condition that it will not create a credit event," Rehn said.

Whether and how to involve the banks, hedge funds and other private holders of Greek debt in a new aid package has been hotly debated for weeks, with some officials worrying such a step could unleash contagion that envelops new countries like Spain, with disastrous consequences for the currency bloc.

On Wednesday, France said it rejected any restructuring of Greece's debt and would not change its stance.

But the German government, worried about a backlash from angry taxpayers and a possible rebellion in parliament, has been pushing hard for some form of private creditor involvement.

In a June 6 letter sent to the heads of the European Central Bank, International Monetary Fund and his euro area counterparts, Schaeuble application a "quantified and substantial" contribution from bondholders as part of any new Greek package.

"such a result can best be reached through a bond swap leading to a prolongation of the outstanding Greek sovereign bonds by seven years," Schaeuble wrote in the letter, a copy of which was seen by Reuters.

It was sent two weeks before a June 23-24 EU summit, at which the bloc's leaders are expected to put the finishing keys on the new deal for Greece.

Such a swap would amount to a restructuring of Greece's privately held debt, even if it was done on a voluntary basis, and ratings agencies have warned that they would view it as coercive and classify it as a default.

"If they do anything like Schaeuble is suggesting then the ratings agencies will smash (Greece) and then they will move on and smash Portugal and Ireland," one trader said, naming the other two countries that have required EU/IMF bailouts.

Reflecting those fears, the cost of insuring Greek debt against default rose as did the premium investors demand to hold Greek, Irish and Portuguese debt instead of German benchmarks.

Goal David Geen, general counsel of derivatives industry body ISDA, said a debt exchange that pushed out maturities would typically not trigger payment of credit default swaps and that could make it palatable for policymakers.

BANKS OPEN TO MATURITY EXTENSION

The stance of the ECB on private sector involvement will be crucial in any deal.

The central bank is believed to be examining a debt swap scenario in which credit rating agencies would declare Greece in limited or "selective" default for a short period of time.

That would probably force it to impose a ban on the use of Greek debt as collateral in its money market operations, but the impact on the Greek banking system could be minimized through emergency liquidity measures until Greece was taken off limited default status.

The ECB could give investors an incentive to participate in a swap by removing the old Greek bonds from its list of eligible collateral. HAD officials are also discussing sweeteners.

Jean-Paul Chifflet, the head of French bank Credit Agricole, told Reuters in Milan that he expected authorities to broach the possibility of a maturity extension with him soon and voiced support for the idea.

"If we lighten Greece's sovereign debt load it should benefit the Greek economy and therefore the actors of the Greek economy," said Chifflet. "I am very much in favor of this."

Several bankers at a conference in Koenigstein, Germany also said they expected a deal of this sort.

"banks and creditors must participate," said Karl-Georg Altenburg, JP Morgan's senior country officer for Germany.

A large number of the big German banks that hold Greek debt are partly owned by the government, meaning Berlin would have direct influence over their decisions on a debt swap.

Bank for International Settlements (BIS) data published this week showed German and French banks hold the most Greek sovereign debt of all foreign institutions, with exposure of 23 billion and 15 billion euros, respectively, at the end of 2010.

Beyond domestic considerations, Berlin may be worried that if private creditors do not participate in the new bailout, the share of debt owned by official creditors - euro area governments, the ECB and IMF - will rise to the point where a future restructuring for the private sector accomplishes little in terms of returning Greece to a sustainable debt path.

Greece's debt burden stands close to 340 billion euros - or roughly 150 percent of its gross domestic product (GDP).

(Additional reporting by Annika Breidthardt in Berlin, Paul Carrel and Marc Jones in Frankfurt, William James in London)

(Writing by Noah Barkin, editing by Mike Peacock/Ruth Pitchford)

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The Greek Finance Ministry held loan closer (AFP)

Athens (AFP) - Union demonstrators Friday occupy the Ministry of finance Greek, calling a general strike, as the Prime Minister flew to Luxembourg for interviews key on a new loan of EU and the IMF now finalize agreement.

Members of the union Communist-affiliated PAME deployed a giant banner from the roof of the Ministry on the central square Syntagma, call to mobilization against a wave coming from additional austerity measures and sales of assets.

"Dawn forces today the PAME symbolically occupied the Ministry of finance, calling on workers to increase, organise their fight and prevent measures of the barbaric and anti-popular Government passing,"the affiliated Union of Communist said."

Protesters replaced the flag of the European Union on the roof of the Ministry with a banner of PAME and implemented speakers screaming slogans and songs.

"This is our debt to fight for our children," said a message recorded, followed by a refrain of the song: "No, we do not sell."

A senior unionist PAME, George Perros, said that the Group intended to remain in the Department to evening.

"Stay us here until 7 pm (1600 GMT) and join a protest PAME street in the Centre of Athens," he told AFP.

Prime Minister George Papandreou is due to Luxembourg later Friday for talks with the Chief decision maker of the euro area and Jean-Claude Trichet on the economic crisis of the Greece.

Athens needs to a slice of 12 billion euros ($17 billion), part of a rescue loan 110 billion euro global EU Monetary Fund International and the European Central Bank to pay the Bills of the following month.

But with its economy still in the doldrums, Greece tries to broker additional loans of the so-called "troika" which has saved from bankruptcy last year.

Greek newspapers reported Friday that tortuous talks with the EU, the IMF and the European Central Bank for the 12 billion dollars-euro loan instalment had concluded and that announcements were planned later in the day.

Financial daily Naftemboriki spoke of a new "three-year rescue deal" in exchange for a new loan more than 60 billion euros ($86 billion).

"A report (on the conclusion of the negotiations) and the new package of aid coming is to be announced today, according to sources, said pro-Government daily Ta Nea.".

The new rescue contract must be taken by the Ministers of finance Europe, a meeting on 20 June Ta Nea added.

The talks of the EU and the IMF have dragged on for an unprecedented four weeks, raising the concern that a disastrous deadlock was imminent.

Additional austerity measures adopted by the Government for a new rescue plan sparked anger mounting.

And a drive to privatize euro 50 billion to reduce the debt, including the large firms such as telecoms main of the country and electricity operators, has caused more indignation.

Thursday, Government spokesman George Petalotis was harassed and bombed with fruit and pots of yoghurt by protesters, as happens to give a speech to the House of the people an elder in the suburb of Athens of Argyroupoli.

Later, he was evacuated by the police without injury.

The Government has awarded the incident on the small party of the left-wing Coalition which has led to demonstrations against the Government and whose young leader Alexis Tsipras equated famous Greek PM of former Chilean dictator Augusto Pinochet.

Since last week, tens of thousands of Greeks are gathered together in the Syntagma Square main Athens, to protest against the successive waves of reduction of expenses and hiking who brought a deep recession and many layoffs of tax.

Country's main unions Thursday called another general strike on June 15, the third this year against government economic policy and a series of mobilizations June 9 to State enterprises under privatization.

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Summary box: Greek debt deal hopes lift stocks (AP)

Greece DEAL: Greece can almost be an agreement to obtain another package of financial assistance from its neighbours in Europe. Germany can back its push for an early restructuring of the debt of the Greece, a change that would contribute to the Greece to get more help.

DEFLATING confidence: the Conference Board reported that its monthly survey found that Americans lose faith that the economy is improving. The surprisingly poor results were caused by concerns about jobs and inflation. .

DOWN months: major indices each has dropped by more than 1% in May despite gains Tuesday. The Dow index rose 128 at 12,569.79 points.

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Responsible for EU finances to meet in Vienna on Greek debt (AFP)

Brussels (AFP) - European finance officials will meet in Vienna Wednesday to thrash group the Greece debt problems, with a second rescue plan in exchange for new cows lean and compromise sale appearing more likely.

As a mission of EU - IMF Athens closer to its conclusion, European diplomatic and Government sources said AFP at the meeting of the junior Finance Ministers and officials of the national Treasury is a habitué of collection which prepares the finance ministerial talks, the next deadline June 20 in Brussels.

However, representatives of the States of the eurozone 17 will take off to examine the implications for their finances to a second request for bailout of Athens.

Agenda of the Ministers will cover a hole in the finances Athens estimated at some 60-70 billion euros and new aid possible on a draft report by experts from the European Commission, the Central Bank and International Monetary Fund European, due at the end of the week.

The report, which will identify where the Greece lies in its efforts to redress public finances, could be delayed until Monday, a European source added.

"Good progress, our sense is we are very very close," Amadeu Altafaj, spokesman for European Commissioner Olli Rehn Economic Affairs, told a Tuesday press briefing.

An announcement is expected in the "coming days", which will concern only if the troika recommends the rehabilitation of the next scheduled payments of rescue of the last year - 8, $ 7 billion of loans from partners of the eurozone and IMF€ 3.3 billion.

The Greece should propose new considerable efforts in exchange for money nine in one form or another of partners in the euro area, the IMF and the ECB.

Greek officials are currently locked in negotiations with the representatives of three organizations that year last to the rescue of the country with a loan of 110 billion euros ($157 billion).

Athens is a regular payment of the loan, EUR 12 billion, to pay its bills in July.

But the IMF has threatened to withhold its share of the funding without an agreement more extensive that will make the Greece debt - more than 350 billion euros - sustainable.

The top-selling Greek daily Ta Nea said Tuesday, citing sources in Brussels, that the country will receive the new loan in exchange for additional spending cuts and a faster pace of privatization.

During this time the Wall Street Journal reported that Germany plans to abandon its push for a rescheduling of Greek debt to facilitate a new loan package.

The euro climbed Tuesday on hopes that the Greece could receive a new loan of rescue, passing at $1.4409 in the end of the morning trade of $1.4282 later Monday.

Head of the Central Bank of Italian Mario Draghi, which is defined at the head of the ECB, has warned that the debt crisis in Greece, Ireland and Portugal could have "significant systemic effects" in the euro area.

He said "European monetary and economic union is facing its most difficult test since its creation". "There is no shortcut.

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ECB official: Greek New helps study (AP)

Frankfurt, Germany - Greece could obtain an another euro20 billion (28 billion dollars) with fellow euro countries and raise three times this austerity again through measures such as the sale of the property of the Government, a senior European Central Bank official said.

Lorenzo Bini Smaghi, Member of the Executive Board of the ECB, is cited by the Financial Times as saying that the needs of the Greece between euro60 billion and euro70 billion next year.

This gap could be filled in several ways, Bini Smaghi said, giving a rough sketch of a plan for additional assistance which was shared between the Government and the private sector contributions.

Money from the private sector would come partly from the sale of property of the Government and reinvested of Greek banks investments and granting of short-term government debt.

The Government half will be divided, the two third of the countries of the euro area, roughly euro20 billion and the rest of the Monetary Fund International.

He said the plan "must be studied more" and would require any concrete commitments of the Greek Government to continue to work to remedy its finances. Greek political parties, has however not week last to accept a new austerity plan.

Bini Smaghi new rejected any reduction of the debt through restructuring - that is, Greece, delaying repayment or pay less than the full amount. He said that it would mean a "major, economic, social and even humanitarian disaster". He said Greek banks could renew some of ther holdings, probably voluntarily.

Earlier in the financial crisis, European officials pressed successfully banks voluntarily maintain their exposures to countries in trouble in Eastern Europe.

The Greece has already obtained a rescue plan last year a European billion of euro value and the IMF. But its economy continues to deteriorate and the Government said that it will be not able to exploit the financial markets as planned next year.

Responsible for the EU are under pressure to secure the funding for at least a year ahead Greece, with Prime Minister Juncker Jean-Claude of Luxembourg saying last week that the IMF rules would not pay on the next episode of its loans to the Greece in June otherwise.

Bini Smaghi said "If the Greek Government is committed to the program, the IMF will disburse entitled primary and I am satisfied that the countries of the eurozone will disburse their part entitled primary".

Monday, the Bank said that for the ninth straight week he left dormant program to purchase bonds of troubled countries. The Bank has interrupted the purchases, which has helped keep yields of interest rate on the obligations of the country, after trying without success to obtain funds from the EU to support rescue.

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Greek EU of race to the second rescue plan project: sources (Reuters)

By Jan Strupczewzki and Harry Papachristou Jan Strupczewzki and Harry Papachristou - Mon May 30, 7: 25 am and

Brussels/Athens (Reuters) - the European Union is working on a second package of rescue for the Greece in a race to release vital loans next month and avoid the risk of the euro zone defaulting countries, EU officials, said Monday.

During this time, the conservative opposition of the Greece demanded lower taxes, as condition for reaching a political consensus with the Socialist Government on new austerity measures, which Brussels says is necessary to obtain additional assistance.

Blows to plug a gap in funding for 2012 and 2013 imminent have accelerated after the Monetary Fund International, said last week he would refuse the next tranche of aid due June 29 unless the EU guarantees meet the needs of financing Athens next year.

Responsible for the EU Senior maintained unannounced emergency with the Greek Government over the weekend, said an EU source.

The Greece has a rescue plan of 110 billion euros ($158 billion) of the EU and the IMF last may, but has since dropped short of its commitments to reduce deficit, increasing the risk of default on its debt 327 billion euros equivalent to 150% of the production.

Tax cuts sought by Conservative leader of the new democracy Antonis Samaras could aggravate the shortfall, but he argues that they are essential to boost economic growth.

EU officials, said that a new package of EUR 65 billion could involve a mixture of loans with a guarantee of the EU and IMF and measures of additional revenue, with unprecedented and intrusive program of privatization of the Greece external supervision. "Should guarantee for new loans and technical assistance of the EU - involvement of the EU in the process of privatization," a senior EU said, speaking on condition of anonymity.

Additional funds for the fact Greece face a fierce political resistance of conservatives in nationalist and fiscal matters in key creditor Northern European - Germany, the Netherlands and the Finland countries - which complicates the task of the Governments of the EU.

Greek daily Kathimerini said the Finance Ministers of the 17-nation single currency area can hold a special meeting Monday next on a new package. European Commission spokesman Amadeu Altafaj dismissed once more the report as "unfounded rumours."

The next scheduled meeting of Finance Ministers of euro area is June 20 in Luxembourg, after was pushed back a week from its original date. It will be followed three days later a Summit of EU leaders to assess the crisis of the long-term debt of 18 months.

MARKETS RATTLED

Massive cuts in unemployment and wages and benefits the EU austerity plan and the IMF have triggered protests from spontaneous youth in Greece and a series of strikes a day by the powerful trade unions.

Comments by weekend by a Dublin Irish Minister perhaps too need a second rescue plan can also fuel opposition to bail further between lawmakers in Berlin, the Hague and Helsinki.

The Transport Minister Leo Varadkar said The Sunday Times newspaper that Ireland was unlikely to be able to return to the capital markets next year as planned in its EU agenda and the IMF.

"This would mean a second program (emergency loans)," he was quoted as saying.

Governor of the Central Bank Irish Patrick Honohan acknowledged at a Monday press conference that market of the debt of the conditions were now worse when Ireland took a bailout of EUR 85 billion last November, but said they would improve.

Uncertainty as to whether the Greece will receive the next tranche of aid 12 billion euros needed to reach EUR 13.4 billion in financing needs in July continued to rattle the financial markets.

10-Year Greek bond over refuge German bunds rose by 20 basis points to 1,387. Two years yields have increased by 58 bps per cent alcohol.

The European Central Bank has maintained a drum roll of pressure against any attempt by EU politicians to restructure the debt of the Greece, same mountain asking investors to accept a voluntary extension of binding deadlines.

Lorenzo Bini Smaghi, Member of the BCE Board said in an interview published Monday the idea that the restructuring of the debt could be carried out in an orderly manner was a "fairytale", saying that this is the equivalent of the death penalty.

"If you look at the financial markets, whenever there is mention of a word like"Restructuring"or"soft restructuring"they are going crazy - which proves that it could not happen in an orderly manner, in this environment, at least" Bini Smaghi said the Financial times.

He also warned against a "Report" debt, or a voluntary extension of binding deadlines Greek, it would be difficult to convince investors to agree to such an agreement without the use of force.

Euro-zone Governments are actively looking for options to modify the deadlines on Greek debt, officials said, although in an interview last week, the German Finance Minister Wolfgang Sch?uble has acknowledged that it was a very high risk.

"The Eurogroup does research for a report - what you can do on a report." Is this possible without a credit event? The Dutch Finance Minister Jan Kees De Jager told reporters Saturday in Cyprus. "It is an investigation, and we will have to await the outcome thereof."

EU officials argue that the Greece could do much more to help itself through the sale of a property of the State Treasury.

ECB Executive Board Member Juergen Stark told Welt am Sonntag newspaper that Athens could raise as much as 300 billion euros of the privatization of State assets.

Greece currently aims to raise 50 billion euros from privatizations by 2015 to help stave off a financial crisis, but the country lacks a proper land registry and the possession of many potentially lucrative property is legally uncertain.

Athens puts in place a sovereign wealth Fund of real estate assets of swimming pool and State issues in companies such as telecom OTE, post Office Savings Bank and ports company.

Top EU officials have asked Greece to intensify privatization of urgency and proposed the creation of an institution of trustee to assist the process similar to the organization which privatized East German businesses after the fall of communism.

(Other reports by Angeliki Koutantou and Ingrid Melander in Athens, Marius Zaharia London, Luke Baker in Brussels; written by Paul Taylor, Mike Peacock-mounting)

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ECB steps up rhetoric against Greek restructuring (AP)

Frankfurt, Germany - the European Central Bank has intensified its opposition to the proposals that the Greece has not pay his debts in time - deepen a split with senior European officials on ways to combat the eurozone debt crisis.

Juergen Stark, Member of the Executive Council six members to the high bank, indicated that the Central Bank would cut the Greek banks in support of emergency credit - in the case of a restructuring pay less than the full or subsequent creditors.

It is a fierce rebuttal of comments by other top EU officials, who said that they would not exclude a stretch out repayments of bond volunteer.

Cut the Greek banks would probably result in bank failures, analysts say, because many of them depend on the Central Bank for daily survival emergency relief. The ECB funding was essential to take Greek banks through the crisis; the Bank has authorized Greek bonds as collateral, despite downgrades of ratings which, under normal circumstances, would have excluded the.

RBS analysts say the ECB pumped euro87.9 billion (125 billion dollars) of credit in Greek banks at the end of March.

The Bank also bought Greek bonds in support of Athens on the bond market - and would take losses himself with other creditors in the case of a restructuring.

"Debt restructuring would be the continuation of the swathes of Central Bank liquidity provision, to the banking system of the impossible Greece" said Stark. "It is a very popular argument, that the only solution is to restructure the debt, but we should think this problem thanks to - what the implications for banks, that the impact on the real economy are very likely to be.".

Stark comments were made Wednesday during a visit to the Greece, but only confirmed by the ECB on Thursday.

The split the wire to consider debt restructuring comes as European leaders are struggling on the opportunity to give the Greece an another rescue plan to prevent disastrous failure that would shake up European Monetary Union the.

The Greece obtained a rescue ($157 billion) billion European in the other countries of the euro and the Monetary Fund International last year after his financial troubles is unable to borrow money at affordable rates on the bond market.

The Greece economy has continued to sink under the burden of spending cuts and tax aimed at making the country solvent again, and the initial goal to return to the bond markets next year has faded. Ireland and the Portugal also had been rescue and IMF packages to avoid default.

So far, the crisis is limited to three small countries, but the fear of longer duration is that their problems will spread to larger members such as the Spain euro which would be too big to bail out.

Jean-Claude Juncker, leader of the Group of Finance Ministers of the euro area, said Tuesday that it would "not exclude" a "report" of the Greece debt, whether still more steps such as the sale of the property of the Government but still need help beyond.

Several bank officials, including Lorenzo Bini Smaghi, Member of the ECB Executive Board, this week rejected any talk of restructuring.

French Finance Minister Christine Lagarde also said restructuring was "to"table."".

Stark was so hard it doubts as to the extent to which the ECB would actually one through. European officials have taken the unequivocal statements before - as against involving Monetary Fund International Rescue - but then was forced back by the crisis.

Analyst Jacques pebbles to RBS, said that the ECB has been increasingly isolated in the debates on the countries with too much debt.

"It is the last card in the hands of the ECB in the warning concerning the implications of restructuring," said pebbles. "The restructuring debate has now been so politicized that decision is now becoming a little remote from the Central Bank."

The ECB with other rift dates back European politicians at a March Summit had agreed on a package of economic reforms. The ECB said that they did not go far enough and have been urging the European Parliament to strengthen.

Pebbles said he had no legal impediment to ECB cutting off the coast of a country banks in the case of a restructuring, but added that its responsibility in support of financial stability would probably force it ultimately to accept a sort of guarantee. Greece Central Bank could also intervene as lender of last resort on its own, he said.

___

Derek Gatopoulos contributed to this report from Athens.

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EU to seek the Bank's commitment to Greek debt: sources (Reuters)

Brussels (Reuters) - the main consideration for the Greece option now is a voluntary agreement by investors to hold their assets Greek bond during the period of another program EU and the IMF from 2011 to 2014, said sources in the euro area.

"Since Monday which is the main option review,"a source with an overview of the discussions on Greek debt said, referring to the meeting of Finance Ministers Monday zone euro.""

"Anything,"soft"or"hard", in terms of debt restructuring that could possibly trigger a credit event, off the coast of the table, the source said, adding the euro-zone officials had consulted of the rating agencies on what action triggers a credit event.

A credit event would require the payment of credit default swaps (CDS), instruments that offer investors to insurance against default.

A voluntary agreement with the investors could be part of a new Greek and austerity package of reforms and more EU/IMF funding from 2011 to 2014, said the source of the euro area. "We hope to have an agreement by the end of June," said the source.

The source pointed out that such an option would include not only of not to sell the positions of the banks in Greek debt, but also in fact buy some Greek bonds to replace the questions which have evolved over the duration of the program.

The current Greek program, under which Athens is to obtain the 110 billion euros ($155 billion) in emergency loans was agreed in May 2010, for three years. But the Greece took time delay with the reforms and the achievement of the objectives of austerity and is unlikely to be able to return to the markets of the next year as originally planned.

Most market participants believe the Greece finance will force it to restructure its debt at a given time. A Reuters poll last week showed that among the 28 mainly sell-side economists and 15 fund managers, only three thought that restructuring could be avoided.

There is great pressure on the Greece of the euro area to announce additional budgetary consolidation measures, structural reforms and advance quickly with privatization to raise additional funds, said sources.

The Chairman of the Finance Ministers of euro as Jean-Claude Juncker, said Tuesday that as a last resort, if privatization and additional austerity measures do not work, a fresh Greek debt restructuring could be envisaged.

Such soft restructuring, could be the extension of the deadlines of the Greek debt.

"The report, we talked and nothing is decided, would be a voluntary gesture of private bond and would essentially consist of an exchange between the existing and longer-term obligations," said a second source of eurozone with knowledge of the talks.

But the first source said an extension of maturity, even if voluntary, would further reduce its net current value and therefore raise a credit event.

This could be dangerous, the first source said, because it was not clear what reaction chain follow contagion and liquidity in the financial sector.

The first source said that the European Central Bank's position was that in the case of a Greek event of credit that the pay-outs of CDS, the ECB would accept Greek bonds as collateral, with liquidity in Greek Bank in question.

A voluntary agreement to maintain exposure to the Greece would not be a credit event and the European Central Bank would return, said the source.

"It is clear that the ECB believes that the Greece can do without rescheduling the debt, but with more money," said a third source eurozone familiar with the discussions.

A fourth source also confirms that the main option under discussion now for investors to hold, on a voluntary basis, their exposure to the Greece.

Economic and Monetary Affairs Commissioner Olli Rehn said Wednesday that an agreement for investors to hold the exhibition in the Greece was envisaged.

It would be as in the case of the Portugal, which has to request such an agreement in his plan to rescue of the European Union and the Monetary Fund International.

"We can see if a type initiative Vienna of the maintenance of the exhibition by the banks in Greece could be useful in this context, we will also examine the feasibility of a voluntary rescheduling and I emphasize the word voluntary," said Rehn.

The Vienna Initiative has an agreement of the European Central Bank, the European Bank for Reconstruction and development, regulators and banks with subsidiaries in Central and Eastern as of January 2009.

The initiative, launched at the height of the financial crisis triggered by the collapse of the Investment Bank Lehman Brothers, parents Bank groups means committed publicly to maintain their exhibitions and recapitalize their subsidiaries in countries in Central Europe and Eastern in the framework of the packages of financial assistance from the European Union and the IMF.

Members of the EU, Latvia, the Hungary and the Romania received these packages and IMF data show that the banks within the framework of the initiative commitments have been honoured.

(Other reports by Julien Toyer in Brussels;) Reports by Jan Strupczewski. (Editing by Ruth Pitchford)

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Summary box: metals rise on fears of Greek debt (AP)

Spotlight on metals: gold, silver and other metals rose on concerns about the Greece debt problems. Investors are worried about the Greece problems can affect the European economy.

SUPPLIES of copper: copper benefited as stocks declined in warehouses for the exchange of metals in London and China after a sustained in the second quarter increase.

RAIN, rain: price of corn has increased as the cool, rainy weather exacerbated delays plantations in some parts of the Midwest and Northern States. Corn supplies remain tight both in the United States and around the world while the demand is strong.

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After another Fitch downgrade (PA) shook the Greek markets

Athens, Greece - rank of The Fitch ratings agency downgraded Greece by three debt encoches still in status junk Friday, another blow of indebted countries which has seen its rate of borrowing spike of new records.

Fitch cited problems with the implementation of the Greece of essential economic reforms, said that European officials are delay and must be expanded.

The downgrade "reflects the magnitude of the challenge to the Greece to implement a program of tax reforms and radical structural necessary to secure State solvency and the foundations for sustainable economic recovery", said the Agency.

He cut the sovereign rating to long-term Greece B + BB + - a blow which has criticized the Government as having been influenced by rumours of media and has failed to consider the additional commitments Athens did.

Many said the magnitude of the debt of the Greece, which stood at about euro342 billion ($488 billion) in 2010, combined with a budget deficit of 10.5% of the GDP, means that the country will have finally to the restructuring of its debt - pay creditors unless the amount in full or later.

Senior European officials agree on if it is a viable option. The European Central Bank opposes the idea, with Economist Chief Juergen Stark indicating the ECB would cut the Greek credit emergency support banks if that had happened.

His comments contrasted with those of other senior officials of the European Union, who said that they would not exclude a stretch out repayments of liaison volunteer.

Earlier this week, Jean-Claude Juncker, who heads the Group of 17 Ministers of finance in the euro area, said he "would not exclude" a voluntary delay rebates, none warned but such approach would be considered only after the Greece makes more efforts to raise funds of privatization and budget cutting.

Uncertainties, Greek, enriched Records, cost of borrowing with interest rates on bonds to 10 years, hovering around 17%. The high interest rates demanded by investors indicates that they fear that the Greece cannot repay its debts.

For the past year, the Greece was in relying on the funds of the European Monetary Fund bailout loans billion package International and other countries in the euro area. In return, it has been implementing strict austerity measures.

European officials, however, warned Greece he escapes its objectives and need urgently speed up reforms, including privatization euro50 billion.

A delegation of the European Union and the Monetary Fund International and the ECB is currently in Athens, review progress in the reforms needed for the country to receive the next batch of loans of rescue, a value of euro12 billion.

"Implementation and political risk increased further austerity measures required to achieve the deficit target of the 2011 budget of 7.5 per cent of the GDP underachievement tax receipts and higher deficit for 2010 that targeted the"Fitch said.""

He added that Greece has also encountered problems in pushing through its plan of privatization of State assets.

"Focus on privatization has increased the risk that political conditional funding under the EU - IMF program will be delayed because of political and technical obstacles to the realization of euro50 billion of asset sales," the Agency said.

The Government, which has often accused of not to base their drawdown on the facts, the rating agencies, said action of Fitch Friday "comes at a time where economic adjustment in the country programme is always examined by the European Commission"the European Central Bank and the FMIet in the intense and unfounded rumours in the media. ?

The downgrade "ignores the additional commitments that the Greek Government has already taken its objectives in tax matters for 2011 and speed up the privatisation programme", the Ministry of finance said, adding that specific policies for these commitments were announced after the current evaluation is completed.

Speaking earlier in the day, Prime Minister George Papandreou insisted that the country will repay all its loans.

"Of course, the deficit is the reason for which the increase in the debt, it is also the reason that markets are expressing reservations as to whether if we can face or not," he said.

"This is the reason why we are obliged to seek the help of our partners... to depend on their help, their loans,", he noted. "And, of course, I want to say here that we will be repaying these loans."

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Fitch decreases rating Greek, warns on restructuring (Reuters)

Athens (Reuters) - cut Fitch rating credit of Greece by three notches Friday, pushing the country deeper into territory junk and warned that any sort of debt restructuring would be by default.

Fitch was the second rating agency to warn that it would consider any imposed loss to holders of bonds default ci after Standard and Poor said the same this month.

"An extension of the maturity of bonds existing would be regarded as an event of default by Fitch and the Greece and obligations would be assessed as a result, the rating agency has."

If private sector "burden sharing" is coercive, the credibility of commitments in principle EU/IMF not only for the Greece, but also the Ireland and the Portugal could be seriously diminished and influence on financial stability throughout the euro areaHe said.

A year after its bailout of the Monetary Fund International European Union, Greece is faced with low incomes and a deep recession, fuelling speculation that it will have to restructure its debt to withdraw himself from the budgetary problems that triggered a crisis in the euro area.

"The rating downgrade reflects the magnitude of the challenge to the Greece to implement a program of tax reforms and radical structural necessary to secure State solvency and the foundations for economic recovery sustained," Fitch said in a statement.

Three-notch cut to "B +" with a negative perspective takes Fitch rating "highly speculative" territory, largely in accordance with Standard & Poor "B" rating and the rank of "b1" from Moody. Both have also warned that they could drag it deeper in junk.

The Greece said that the decision was influenced by "intense rumours" in the press at a time where the Greece program was evaluated by the lenders and ignored the new commitments.

"He overlooks the additional commitments already undertaken by the Greek Government to achieve its fiscal 2011 and accelerate its privatization program", the Ministry of finance said in a statement.

But Fitch said implementation and political risk increased more austerity measures were necessary to achieve the objective of the 2011 of 7.5% of the GDP budget deficit and warned downgrades more if the European Union and the IMF do not produce a credible plan for the indebted countries.

"In the absence of a programme of EU and the IMF fully funded and credible, the rating probably fall into the category"CCC", indicating that a Greek sovereign debt default value was highly likely," Fitch said.

MISSING TARGETS

Analysts said that move was no surprise after disappointing figures for the budget State from January to April, which suggest that the efforts of the Government were not sufficient to meet the objectives of the rescue plan.

"Given the poor economic conditions, more austerity is not guaranteed is reflected in the improvement of the budgetary figures and, in our view, it will be difficult to find a lasting solution without having to resort to a restructuring of the debt of any kind"said Diego Iscaro of IHS Global Insight."

Paul Rawkins, Director Senior Fitch, said that he did not expect to be able to return to the market before may 2013, when its agreement help 110 billion euro EU/IMF expires, and a strong rescue plan had to be put in place beyond this datethe Greece.

"It should probably be long enough for the Greece obtain a recovery in place, the tax to be much better to research and the debt situation begin to go down," said Rawkins.

Fitch said that the more emphasis on privatization has also increased EU funding and the IMF can be delayed, risks as EUR 50 billion in sales of targeted assets will be difficult to meet.

Despite this, Fitch said he believes that the Government remains committed to its budget program and some assets would be sold at the end of the year.

Rating B + reflects the conviction of the EU and the IMF will find fresh funds for the Greece and that its obligations will not be subject to the "soft restructuring" or "re-profiling".

Standard and poor, downgraded credit Greece additional rating into junk territory b may 9, had also warned that any extension of debt maturities bond held by private investors would be considered a selective default.

"The sharing of the private sector constitute probably an Exchange in distress according to our criteria, to which assign us a rating of"SD"for selective default," the Agency said.

The President of the Eurogroup 17 countries Jean-Claude Juncker acknowledged Tuesday Greece may have towards a "soft restructuring" its debt, although that the European Central Bank remains firmly opposed to such a step.

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Eurozone divided over solutions of Greek debt (AP)

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Par GABRIELE STEINHAUSER et DAVID McHUGH, AP Business écrivains Gabriele Steinhauser et David Mchugh, Ap Business écrivains – lundi le 16 mai, 7:18 h HE

Bruxelles – haut fonctionnaires européens sont en désaccord sur l'opportunité d'envisager de modifier les modalités de remboursement de la dette pour les obligations grecques, un déménagement que certains experts disent est inévitable et d'autres jugent trop dangereuse pour la stabilité financière plus large de la région.

Jean-Claude Juncker, président du groupe de 17 ministres des finances de la zone euro, a déclaré lundi il ? ne serait pas exclure ? un retard de volontaire de remboursement de la dette du gouvernement grec qui donnerait le pays qui ont des difficultés plus de temps à corriger son économie et de regagner la confiance du marché.

Mais il a été immédiatement contredit par le ministre des finances Christine Lagarde la France, qui régna sur l'étape out, signe que les fonctionnaires européens sont débattent encore plus quoi faire sur la crise de la dette de Grèce.

Juncker dit attitude inflexible du groupe contre restructuration — ou donnant des créanciers moins de toute la valeur de leurs avoirs bond — ne s'étend pas à ce que lui et autres ont appelé "Report", ou une offre volontaire des détenteurs d'obligations d'accepter de remboursement échelonné sur une période plus longue.

Toutefois, il a averti que la Grèce n'était pas prête encore pour une telle démarche, qui seraient considérés uniquement comme après que la Grèce rend plus d'efforts pour amasser des fonds de privatisation, de compressions budgétaires et de refonte de son économie.

Le ministre des Finances néerlandais Jan Kees de Jager a reconnu plus t?t que les ministres avaient discuté de l'option de la restructuration de la dette massive de la Grèce — quelque chose de fonctionnaires de la zone euro avaient également jusqu'à présent refusé.

? Nous discutons évidemment toutes sortes de sujets, y compris la restructuration, ? de Jager dit qu'il est arrivé à la réunion à Bruxelles. ? Mais en public, nous sommes très réticents à discuter et débattre de la restructuration. ?

De Jager n'a pas dit si son pays ont favorisé une restructuration, mais il a exprimé sa frustration avec la situation désastreuse de la Grèce.

? En ce moment, qu'il semble que la Grèce n'est pas sur la bonne voie, et il devrait être tout d'abord ramené sur la droite suivre ? avant de décider sur toute nouvelles mesures de soutien, il dit des journalistes.

Cette frustration était partagée par les autres ministres, qui a exigé la Grèce prendre les autres mesures afin de que pouvoir réduire son déficit budgétaire pour les objectifs énoncés dans son programme de sauvetage initiale.

Le gouvernement grec a accepté à la privatisation des biens nationaux encore plus pour aider à payer ses factures et adopter des mesures d'austérité supplémentaires et des réformes économiques, a déclaré Juncker.

En mars, la Grèce a déjà engagé à privatiser certains euro50 milliards (71 milliards de dollars) en actifs, tels que stakes dans des sociétés nationales et de l'immobilier, d'ici à 2015, mais les ministres de la zone euro se plaint qu'ils ont vu le peu de progrès sur ces efforts.

? Je ne suis pas tellement heureux avec la Grèce, ? Juncker dit, ajoutant que toute nouvelle mesure devait être approuvé par tous les partis politiques dans le pays.

Les ministres ont dit qu'ils n'a pas discuter en détail si Grèce peut-être aussi avoir besoin de plus de prêts d'urgence de l'UE et le FMI, mais aussi n'excluait pas une aide supplémentaire une fois qu'une mission de contr?le de son programme actuel de sauvetage est conclue dans les prochains jours. Le pays a déjà obtenu certains prêts de sauvetage en milliards d'euro110 il y a un an, mais il reste bloqué dans la récession et verrouillé des marchés de la dette internationale.

Dette de la Grèce est prévue vers le haut de 166 % de la production économique en 2013, et le pays a du mal à obtenir une emprise sur les déficits budgétaires. La plupart des investisseurs et analystes croient à la charge de la dette est si grande et l'économie si faible que seule une restructuration aidera à remettre sur pied.

Athènes devait commencer à soulever des fonds sur les marchés de la dette internationale à nouveau l'année prochaine pour aider à payer ses factures, mais avec des taux d'intérêt pour les obligations de 10 ans grecques constamment au-dessus de 15 p. 100, que cette perspective ressemble plus en plus improbable, laissant le gouvernement avec un énorme déficit.

Pendant ce temps, les ministres de la zone euro a signé au large sur euro78 milliards (110 milliards de dollars) sous forme de prêts au Portugal. Un tiers des prêts de sauvetage proviendra du Fonds monétaire International, tandis que le reste serait divisé en nombre égal parmi les deux fonds de sauvetage de l'Europe — un soutenue par les pays de la zone euro, l'autre par le budget de l'UE.

Un fonctionnaire européen a déjà dit la maturité moyenne des prêts de sauvetage sera 7 1/2 ans — comme le plan de sauvetage de l'Irlande et la Grèce — et à un taux d'intérêt d'environ 5,7 %. C'est plus bas que le taux de Qu'irlande a payer pour son plan de sauvetage.

Dans leur déclaration, les ministres a déclaré lundi que les autorités portugaises ont convenu de ? encourager ? investisseurs privés pour maintenir leur exposition au pays "sur une base volontaire" et sortez pas de fonds. C'était une demande clée de la Finlande, qui avait du mal à obtenir l'approbation pour le plan de sauvetage de son Parlement.

Comment exactement qui devrait être fait, sera aux autorités portugaises, dit Juncker.

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Asia mixed share on Greek debt, Wall Street drop (AP)

BANGKOK - renewed concerns about Europe's debt, falling oil prices and U.S. technology company disorders weighed on Asian markets stock Tuesday.

The price of oil fell to $ 97 a barrel, which extends a two weeks out in the concern of investor that the slowdown in us economic growth could undermine demand for crude oil. The dollar strengthened against the euro and the yen.

Nikkei 225 of the Japan was flat at 9,560.65, with exporters rising on a weakening yen. Sharp Corp. has increased by 2.2%, Sony was 1.1 per cent higher and Hitachi Ltd. was acquired by 0.4%. Actions included subsidence utility which may have to intervene to help the Tokyo Electric Power Co. to deal with financial losses after a tsunami March 11 which destroyed one of nuclear power plants of the company.

TEPCO struggled for two months make a leak of radiation of the Fukushima Dai-ichi crippled plant northeast of the Japan under control.

Overall damages should be tens of billions of dollars (billions of Yen billion). Kansai Electric Power Co. lost 4.1%. CHUBU Electric Power Co. Inc., who has made a request of the Government to close down a nuclear power regarded as vulnerable to tsunamis, dropped by 5.7%.

TEPCO dragged 10.7 per cent. Investors dumped TEPCO shares after Investors Service of Moody Monday cut its credit rating on troubled society utility one notch to just above junk status.

The end stocks have become less attractive to many investors, account required to the scarcity of the good economic news. Sean Darby, Chief Asian strategist at Nomura in Hong Kong, said traders expect shares to bottom.

"I think that people are really waiting for markets to withdraw," said Darby. "We had a very good performance in the course of the last quarter".

Hong Kong Hang Seng index was 0.1% lower than 22,935.84. Index of the Korea of southern ABN, flat to 2,103.57 shares of high-tech after their US counterparts down.

Hynix Semiconductor Inc. fell 2.5 percent and rival LG Electronics sliding 0.4%. In the United States, technology companies have been among the biggest losers Monday, with Yahoo! Inc. and Amazon.com Inc., fall of more than 4%.

S & P/ASX 200 gained Australia 0.7 per cent to 4,682.70. Landmarks in mainland China, Taiwan and New Zealand were also higher. Markets in Singapore, the Thailand and the Malaysia were closed for a holiday.

In New York Monday, problems of society and technology concerns renewed on Europe debt drag stocks lower, European day of Finance Ministers approved 110 billion dollars in rescue loans to the Portugal. They have not yet decided on a second rescue of the Greece plan.

The arrest of the head of the Monetary Fund International should resolve more difficult problems of the Greece. The official, Dominique Strauss-Kahn, France, had been very involved in the attempt to resolve debt crises in the Portugal and Greece. He is detained without bail on charges of sexually assaulting an employee of the hotel in the city of New York.

The Dow Jones index lost 0.4% to close at 12,548.37. The standard & poor 500 index fell by 0.6% to 1,329.47. The Nasdaq fell by 1.6% to 2,782.31.

Investors were waiting for some major economic reports to Washington, including the Tuesday release of housing starts and industrial production for April, to measure the health of the US economy.

Benchmark crude for June delivery fell 30 cents to $97.07 US per barrel in electronic trade on the New York Mercantile Exchange. The contract fell $2.28 to settle at $97.37 Monday

In currencies, the euro weakened to $1.4170 by $1.4192 Monday afternoon in New York. The dollar gained to 81.18 yen 80,84 yen.

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Euro zone eyes move of Greek debt, dos Portugal assistance (Reuters)

Brussels (Reuters) - Ministers of Finance of zone Euro said for the first time Monday that they would consider asking the Greece private creditors to extend the deadlines on their obligations to buy more time to repay its enormous debt to Athens.

At a meeting in Brussels has been overshadowed by the arrest of the week of the Fund monetary International (IMF) Chief Dominique Strauss-Kahn on charges of rape, the Ministers also approved a rescue for the Portugal plan and sustained Italian Mario Draghi to become the next President of the European Central Bank.

Strauss-Kahn, who has headed the IMF based in Washington since 2007, had planned to attend the monthly meeting of Finance Ministers from the bloc 17-nation currency to discuss their crisis widening of debt.

But instead he is forced to appear before a court in Manhattan, where prosecutors described in graphic detail to its alleged attack of a Chambermaid in a midtown Manhattan hotel on Saturday.

Through his lawyers, Strauss-Kahn denied the charges, but the judge refused to grant bail after the prosecution has warned that it might try to flee the country. It must be transferred to notorious Rikers Island prison in New York pending his appearance before the Court next Friday.

Events across the Atlantic has cast a cloud over the meeting, where Ministers struggled with a new plan for the Greece, which is struggling to achieve the objectives related to its rescue EU/IMF 110 billion euros ($155 billion)sealed a year ago.

Many economists believe Greece will become the first Western European country to restructure its debt since the Germany of post-war in 1948, but policy makers have ruled out imposing painful losses, or "hair, cut" on the private sector of the country before 2013 creditors.

"RESHAPING".

Jean-Claude Juncker, of Luxembourg, who chairs the meetings of Minister of finance euro-area, left the door open to a "report" of debt of the Greece whereby investors would be encouraged to agree to an extension of the maturity of the debt they hold.

"I must repeat that a major restructuring is no option." No one was mentioning this evening the need for a major restructuring, "said Juncker.

He added: "I would not exclude definitively a sort of report,". "It does not Report or anything, its measures and actions and measures, and may then Report.".

It is not known how decision makers could convince Greek debt holders to agree to a voluntary "soft restructuring" of this kind. Even if they succeeded, this step would only buy more time Athens, not to reduce the burden of sovereign debt of approximately 330 billion euros.

Juncker has described the situation in Greece as "extremely difficult" but held hope that his problems may be brought under control if Athens has intensified its reforms to meet its budgetary objectives 2011 and moved quickly to sell property of the State.

Another sign of increasing pressure on European Governments to broaden the burden of their rescue plans of taxpayers to banks which have lent to what is called peripheral eurozone countries, Ministers have backed bailout of 78 billion euro of the Portugal but Lisbon insisted seek private bond agreement to maintain their exposure to service its debt.

Finland had insisted on a certain form of participation of the private sector to ensure its Parliament, which includes of Eurosceptic parties, will approve the rescue plan.

It was the first time a country of the euro area has explicitly asked voluntary pledges not private creditors to sell on their holdings of debt.

Lisbon cannot force the holders of the debt to maintain their exposure, so it is not known if the pledge will be more than a symbolic impact. The Portugal is the third country in the euro area for a rescue plan after the Greece and the Ireland, the last year.

DRAGHI SLAM DUNK

For the Central Bank Italian Chief Mario Draghi, in replacement of Mr. Jean-Claude Trichet as head of the ECB when the French mandate expires at the end of October had been widely expected after that Chancellor German Angela Merkel threw its weight behind him last week.

Draghi resumed the ECB at a crucial time, with the rage of the sovereign debt crisis and after the Bank based in Frankfurt triggered his interest rate of reference for the first time in nearly three years in April.

After the withdrawal of surprise of Axel Weber the ECB race in February Germany, Draghi quickly emerged as the favorite and Europe has avoided a disorderly in the nomination fight.

Strauss-Kahn should resign or be dismissed from his post at the IMF, the battle on who should succeed him could be much more intense.

Europe has had a longstanding claim top position of the Fund and would be likely to care to a person who, as Strauss-Kahn, will be committed to helping the block to fight the sovereign debt crisis. French Finance Minister Christine Lagarde is regarded as the European candidate the top of the page.

But a change of power recent IMF to emerging countries means that countries like China, the India and the Brazil could press for a new head of a developing country.

(Additional reporting by Jan Strupczewski; editing by David Stamp)

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Greek Finmin suggests extension of repayment EU/IMF (Reuters)

PARIS/Athens (Reuters) - the Finance Minister Greek George Papaconstantinou suggested Monday that the EU and the IMF give Greece more time to repay its rescue and funds at a cheaper rate, for him to allow out of its severe debt crisis.

In an interview with French daily liberation published a coming day of an inspection visit by lenders, Papaconstantinou became the first Greek official to float the idea of a relaxation of the conditions on the rescue of $ 110 billion in addition.

The EU has lowered the interest rate and rescheduled refunds on March rescue plan to give some respite to Athens.

Reaffirming that the Greece excluded a restructuring of its debt, despite the more markets in addition to Paris that she will finally do so, said Papaconstantinou:

"It would be better that still lengthen us the repayment schedule of the 110 billion euros that our partners have lent us and that we have in addition more low interest rates." In this way, we could meet our other reimbursements. ?

A year after that area partners euro the Greece and the IMF saved from bankruptcy with a bailout plan of the pain-to-gain Athens required to reduce public spending and stimulate the collection of taxes, the Greece is faced with a deep recessionlow incomes and rising yields soared on its obligations.

"There are those who think (restructuring) is inevitable," Papaconstantinou said. "But there are also those who have bet lots of money on a Greek default." That explains the ridiculous rumours in recent weeks. There is no doubt of the restructuring. ?

NECESSARY BUT NOT SUFFICIENT?

An analyst said a rescheduling of repayments of rescue EU and the IMF would not be sufficient to avoid a restructuring.

"I would say that the lengthening of the EU loan and reduce the rate of loan could be a condition necessary to meet its budget targets, but not sufficient, the Greece", said analyst Kornelius Purps Unicredit.

Sign Greek bond dated short pink yields Monday, although the bid/offer spreads were in the region of 500 cents for two and five years Greek paper, reflects a lack of liquidity.

Papaconstantinou said the Greece was headed for a return to economic growth in the second half of 2011 and should see a full year of positive growth in 2012, but it was too early to see the end of the country's debt crisis.

"We are in the middle of the tunnel." Too far to see where we let go, that sometimes we forget that we had a narrow escape from default and too far from the output to see the light, which means "he says.

EU officials and the IMF start an inspection visit to Athens on Tuesday to assess whether the Greece has made enough progress on the rescue plan financial and objectives of the reform to receive a fifth tranche of 12 billion euros in aid.

Leaders of the zone euro have agreed at a Summit in March to extend the maturity of loans of rescue, to the Greece to 7.5 years doubling time of refund. They also agreed to lower the interest on their bilateral loan in Greece of 100 basis points.

(Reported by Catherine Bremer in Paris and Renee Maltezou Athens.) Written by Ingrid Melander. (Editing by John Stonestreet)

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Europe stocks of Greek debt, expect data (AP)

Frankfurt, Germany - pink stocks European moderately Tuesday as traders returned to the feast of Easter to with a big week of economic and precinct data the shoulders to the news of bad budget of Greece hit by the crisis.

After closure since Thursday, Dax the Germany increased by 0.5% to 7333.38. The London FTSE 100 index was 0.4% to 6045.32, while the France CAC - 40 was 0.3 per cent to 4,035.30. Asian shares fell on disappointing profits of U.S. companies.

Future actions U.S. increased before the New York open advance another day of large gains, with the Dow Jones index 0.3 percent at 12,467 and 0.4 the Standard & Poor to 1,336.4.

Ford Motor Co. has provided positive news with benefit of 2.6 billion for its best first quarter in 13 years, and 3 M also beat expectations and raised its Outlook. The figures of Coca-Cola fell just short, however.

Control of Greece with its heavy burden of debt produced more headlines downbeat, with the European statistical agency saying budget deficit rose year last 10.5% of GDP, above the forecast of 9.6%.

A clear review of the budget deficit of the Greece had launched a Europe debt crisis at the end of 2009, but it has been widely reported in advance in media information and price by markets. The country, has been made by the European Union and the IMF and is still struggling to avoid having to restructure its debts.

Analysts at Credit Agricole, said that impact of this revision has been diminished by the improvement of statistics formerly Greece soft keep and announced more reductions to meet the increase in the deficit of.

"The good side, now that the IMF and Eurostat experts have marked the Greece as more reliable financial data, one would expect the revision to be the latest in a long series, and the Greek Government has already announced additional austerity measures to offset the budget deficit"they said.""

While business week Europe is shortened by the day, markets are subject to mixed signals from heavy data flow that includes a meeting of US Federal Reserve for two days beginning Tuesday, the Standard & Poor figures and key housing s/Case-Shiller survey for the U.S. consumer confidence. During this time in Germany, more great economy of Europe, has revenues of Deutsche Bank AG, Daimler AG, Bayer, Merck and SAP towards the end of the week.

The meeting of the Fed will be monitored for confirmation that the Central Bank will end its $ 600 billion program to expand the money supply through its purchase of bond called quantitative easing program.

April U.S. consumer confidence should increase, although high oil prices limited gains of optimism and willingness to spend, while the markets expect the Case-Shiller index to show a slack housing market which has weighed on the restoration to the United States continues.

In Asia, index Nikkei 225 of Japan a decrease of 1.1% to 9,568.27, with investors unloading blue chip shares before that should be a season of gains punish. Nintendo Co. Ltd., announced Monday that its annual profit fell for the second consecutive year, the fall of the sale of its game machines.

Other companies include Japanese main reports this week Canon Inc., Honda Motor Co. and Komatsu Ltd., second construction machinery manufacturer in the world after Caterpillar Inc. Canon shares decreased by 1%. Honda fell by 1.6% and Komatsu fell 1.5%.

Toyota Motor Corp. collapsed 2.4 percent, a day after the announcement of its production of the Japan car collapsed narcotic 62.7% in March due to parts of a supply crunch after the earthquake and tsunami on 11 March.

Elsewhere, ABN Korea in the South declined 0.6% to 2,204.51, and Hang Seng in Hong Kong fell by 1.1% to 23,865.91. Index Composite of Shanghai of mainland China lost 0.9% to 2,937.73. Landmarks in Taiwan, Singapore, the Indonesia and the Philippines were also low.

Low compensation on Wall Street had pushed stocks lower Monday. The Dow Jones Industrial Average lost 0.2% to close at 12,479.88. The standard & poor 500 index lost 0.2% to 1,335.25. The composite Nasdaq edged 0.2 per cent to 2,825.88.

Kimberly-Clark, the manufacturer of Kleenex and Huggies, fell by 2.7 per cent after having missed earnings estimates. The company also lowered its earnings forecast for the full year. Johnson Controls has fallen by 2.8%, after saying it expects revenues to abandon the $ 500 million in the third quarter due to the earthquake in the Japan.

Benchmark crude for June delivery fell 12 cents to $112.16 US per barrel in electronic trade on the New York Mercantile Exchange. The euro has increased from $1.4618, 0.3 per cent on the day. The yen slipped 0.1% to 81.73 against the dollar.

___

Pamela Sampson in Bangkok contributed to this report.

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