Thanassis Stavrakis, Associated Press
ATHENS, Greece — Greece will look to convince international creditors Tuesday that it deserves the next installment of its bailout loans that will prevent it from a messy default next month.
Greek Finance Minister Evangelos Venizelos is to hold a teleconference in the evening with officials from the European Commission, International Monetary Fund and European Central Bank, collectively known as the troika, to convince them the country will meet strict budget targets promised in return for the rescue funds.
Markets are fairly hopeful that Greece will do enough to receive the money and avoid a default that could plunge Europe's banking system into turmoil. Stocks across Europe and the euro were trading higher, brushing aside the latest downgrade of Italy's credit rating downgrade from Standard & Poor's.
Since May 2010, Greece has been dependent on a €110 billion ($150 billion) bailout from other eurozone countries and the IMF to continue servicing its debt and to pay salaries and pensions. Without the next installment, worth €8 billion, the country only has enough funds to see it through mid-October.
The funds had been expected in September, but the country's creditors have said a decision on whether to disburse the funds will not be made until early October.
A first teleconference between Venizelos and the troika Monday night was "productive and substantive," the Finance Ministry said. Technical teams from the three bodies were working on details Tuesday morning, ahead of the second call Tuesday night.
Ahead of the teleconference, Venizelos was to attend a parliamentary committee meeting, at which the director of Greece's Statistical Authority has been summoned to testify after a member of the outgoing agency's board claimed budget deficit figures in 2009 were miscalculated, inflating the annual figure. A judicial investigation has been launched into the claims.
Inspectors from the IMF, ECB and Commission suspended their quarterly review of the country's progress on meeting its pledges earlier this month, amid talk of missed targets and delayed implementation of reforms.
The government hurriedly announced an extra property tax — to be levied in 2011 and 2012 and charged through electricity bills to make it easier to collect. But the news was greeted with an outcry from a public already reeling from salary cuts and the recession. State electricity company unionists have threatened to refuse to collect the taxes through the bills, and to prevent those who don't pay having their power supply cut off.
The Socialist government has already taken a series of austerity measures, cutting public sector pay and pensions, and issuing a series of tax hikes. The measures have led to a backlash from unions, who have responded with strikes and demonstrations.
Civil servants were planning a rally in Athens later Tuesday, while about 250 high school students also marched through the center of the city to protest shortages in schoolbooks and other supplies at state-run schools.
But efforts so far have proved to be not enough to tackle the country's severe debt crisis, which has roiled the euro and threatened other eurozone countries. In July, European countries agreed to extend a second bailout, worth €109 billion, to Greece. However, the details of the second rescue package, which includes voluntary bond rollovers, have still to be worked out.
On Monday, the IMF representative in Greece, Bob Traa, urged the government to speed up structural reforms and avoid further emergency taxes, saying Greece needed to speed up its reforms in tax collection and reduce the size of the overmanned public sector.
Separately, Athens raised €1.625 billion ($2.22 billion) in an auction of 13-week treasury bills Tuesday, at a marginally higher interest rate than a similar sale last month.
The bills were sold at a yield of 4.56 percent, compared to 4.50 percent in the August 16 auction. Demand was also marginally down, with the sale 2.84 times oversubscribed, compared with 2.95 times in August. Athens had originally been seeking to raise €1.25 billion ($1.71 billion).
The interest rates demanded for its long-term debt such as bonds has been prohibitively high since last year essentially locking the country out of the international market.
Derek Gatopoulos in Athens contributed.
- 23 of the best Shakespearean insults to...
- The Latest on Nepal Quake: Stronger quake may...
- Clinton Foundation acknowledges mistakes in...
- More than 2,500 confirmed dead in Nepal...
- Utah's Tibetan community prays, mourns for...
- Former Romney finance chairman courting a...
- How to help Nepal earthquake victims
- Tuesday's the day: Same-sex marriage...
- Former Romney finance chairman courting... 59
- Gay marriage a difficult issue for GOP... 32
- House Benghazi panel calls Clinton to... 29
- Yellowstone supervolcano is super big,... 24
- American, Italian hostages killed in US... 22
- Clinton Foundation admits missteps in... 15
- Clinton Foundation acknowledges... 13
- Hatch, Lee split on new attorney general 13