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The European commission has no rescue plan for Greece

13 March 2010 / 18:03:08  GRReporter
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The European commission has not reached to an agreement regarding the rescue plan for the Greek economy said the spokesman of the institution Jonathan Tod. His statement was caused by today’s publication in the British newspaper “Guardian”, which claims that the commission has reached to a decision to help the economically problematic Greece with an amount of 25 billion euro. The publication quotes an anonymous source from the European commission who said that the financial injections would be given to Greece on bilateral grounds as loans or guaranties for loans. The mechanism would be started only if Greece asks for help from Brussels. Just for the year 2010 the needs of the country for foreign loans are 53,2 billion euro.

“Guardian” quotes the European commissioner of the economic and financial matters Oly Ren who states that the case of Greece is corner one for the euro zone. “If Greece goes in bankruptcy this will be a failure for all of us. It will undermine the authority of the European Union, not just for a long term, but may be forever. The Euro is not just a currency, it is the central political idea of the EU. We are really at a crossroad”, he says before the paper.

Meanwhile it became clear that Brussels forecasts a decrease of the Gross domestic product of Greece by 2,25 percent in 2010. The forecasts of the Bank of Greece are for a 2% decrease, while the financial ministry - 1,5 to 2 percent. On Monday, at the meeting of Ecofin will be presented a detailed report about the condition of the Greek economy. Few days ago Deutsche Bank came up with a report about Greece where the forecasts for the recession reaches 4 percent and the unemployment will reach 20 percent.

In the report of the EC are pointed out also 5 traps in which the socialistic government of Greece could fall and which do not allow for the goals of the Program for stability to be executed.

  • the recession to be greater than forecasted just like the forecasts for 2009 were for a decrease of the GDP by 1,2 percent, while it actually dropped by 2 percent
  • the interest rates for loans to remain high even after the enacting of the new measures
  • the budget figures for the income from taxes could turn out to be very “ambitious”
  • the incomes as a whole could turn out less than expected
  • the amounts which Greece expects to receive from the European funds this year could turn out to be not realistic.

The results of the execution of the budget for the first 2 months of the year are currently disappointing. The incomes have increased by 7,8 percent instead of the expected 9,2 percent. The expenses part of the budget is also disturbing having in mind that the government stopped the return of the VAT to the exporting companies until May 31st, 2010.

Picture - Katimerini

Tags: European help Greek economy crisis
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