Greece must press on with reforms despite pain - ECB's Asmussen

Greece's Finance Minister Yannis Stournaras (L) and European Central Bank (ECB) executive board member Joerg Asmussen walk towards to a podium before a news conference in Athens August 21, 2013.

Credit: Reuters/John Kolesidis

ATHENS | Sat Aug 24, 2013 7:28pm BST

ATHENS (Reuters) - Greece can achieve a primary budget surplus this year and growth in 2014 if it sticks to economic reforms, but a return to bond markets will be challenging, European Central Bank Executive Board member Joerg Asmussen told Sunday's To Vima newspaper.

Asmussen was in Athens this week to meet senior government officials and take stock of the economy. His visit was overshadowed by speculation of a new bailout for Greece after comments by German Finance Minister Wolfgang Schaueble.

"Having a low but positive rate of growth next year is achievable, but there must be persistence with reforms," Asmussen told the paper in an interview.

"I understand the difficult political situation and the small parliamentary majority, but what has been achieved with such political pain up to now must not be demolished. What's the credible alternative solution?" he was quoted as saying.

Mired in its sixth straight year of recession, Greece has already been bailed out twice since 2010 with 240 billion euros of loans coordinated by the ECB, European Union and International Monetary Fund.

Athens faces a funding gap of about 11 billion euros in 2014-15 after its current bailout programme ends in the first half of next year and its euro zone partners have pledged additional support until it can tap markets again.

"It is true that the debt level will rise in the next years and a full access to markets will be a challenge," said Asmussen.

But he said speculation of a third rescue package was premature.

"Repeated talk of a debt reduction, a haircut, does not help. It distracts the attention of all stakeholders from what needs to be done under the current adjustment programme. We must make this programme work," he told the paper.

He said the part of the bailout that dealt with the recapitalisation of Greece's top four banks was a success, helping to restore financial stability, with funds left over at the bank bailout fund as a cushion for any future needs.

Asmussen told the paper complacency and reform fatigue were the biggest risk to an improving European economy.

"The biggest risk to the positive trend I see shaping up is not doing enough, believing that markets are calm or that we are in safe waters," he said.

(Reporting by George Georgiopoulos; editing by Tom Pfeiffer)

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Report: Germany rules out 2nd debt cut for Greece

BERLIN (AP) — Germany's finance minister has categorically rejected a second writedown of Greek debt.

Wolfgang Schaeuble told weekly Bild am Sonntag in an interview that Greece would continue to receive support beyond 2014 if needed and provided the country meets the demands of international creditors.

Schaeuble was quoted as saying "it's certain, however, that there will be no second debt writedown for Athens."

Extracts of the interview, to be published Sunday, were released by the paper Saturday and confirmed by the Finance Ministry.

With Germany's general election two months away, Chancellor Angela Merkel's conservative government has been at pains to appear firm on Greece's international bailout, which is unpopular with many Germans.

Last year Greece's debt was restructured with private-sector bondholders.

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Report: Germany rules out 2nd debt cut for Greece

BERLIN (AP) — Germany's finance minister has categorically rejected a second writedown of Greek debt.

Wolfgang Schaeuble told weekly Bild am Sonntag in an interview that Greece would continue to receive support beyond 2014 if needed and provided the country meets the demands of international creditors.

Schaeuble was quoted as saying "it's certain, however, that there will be no second debt writedown for Athens."

Extracts of the interview, to be published Sunday, were released by the paper Saturday and confirmed by the Finance Ministry.

With Germany's general election two months away, Chancellor Angela Merkel's conservative government has been at pains to appear firm on Greece's international bailout, which is unpopular with many Germans.

Last year Greece's debt was restructured with private-sector bondholders.

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Greece gets green light for 4 billion euro payment, EU says

BRUSSELS (Reuters) - Euro zone officials have approved the transfer of 4 billion euros ($5.3 billion) of funding to Greece and euro zone governments are expected to approve disbursement by Monday, the European Commission said on Friday.

"With the proviso that the national approval procedures are completed, which we expect to happen by Monday, the disbursement can take place," Commission spokesman Simon O'Connor told a briefing, referring to the approval by euro zone governments.

The money approved amounted to 4 billion euros, O'Connor said, split between 2.5 billion from the euro zone's temporary bailout fund, the EFSF, and income generated from national central banks' holdings of Greek government bonds.

(Reporting by Robin Emmott; Editing by Adrian Croft)

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Greece: Wealthy Shipowners To Bail Out Economy

The owners of Greece's wealthy shipping industry, under fire over low tax bills amid recession and austerity, have agreed to help out the struggling economy.

The government says the agreement with the Hellenic Shipowners Association will bring in about 140m euros (£120m) a year.

According to an official statement, 441 shipping companies with 2,769 ships will make voluntary payments over a three-year period.

Prime Minister Antonis Samaras said: "The agreement for your voluntary participation in the state budget with 90% of the fleet sailing under a Greek flag, and 65% of the fleet sailing under a foreign flag, is truly moving."

The government estimates it will be worth about 75m euros (£64m) for the rest of 2013 and up to 140m euros in a full year.

The Merchant Marine Ministry said in a statement: "The signing of the agreement confirms the willingness of the shipping community to voluntarily contribute, for three years, to the national efforts in stabilising the country's economy."

Greek shipowners are leaders in their sector internationally, controlling about 15% of the world's merchant fleet, but only about a third of their vessels sail under the Greek flag.

Greece is going through its sixth consecutive year of recession amid brutal austerity cuts and pressure for more jobs to be slashed in the public sector.

This has increased resentment against the shipowners because vessels registered under foreign flags generate profits in low-tax regimes, and in Greece the shipping sector benefits from special tax advantages.

Earlier this year, the shipowners were forced to accept a tax imposed on vessels sailing under foreign flags.

Greece's merchant marine sector accounts for more than 48% of the country's balance of payments, topping the list between 2009 and 2011, followed by tourism.

The announcement of the voluntary payments comes after the Greek parliament approved a package of further reforms putting thousands of public sector jobs at risk.

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