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September 30, 2020

PM Papademos: Greece keeping euro is country’s only choice

Greek Prime Minister Lucas Papademos, charged with securing international financing to avert a collapse of the economy, said keeping the euro is the only way forward for the country. “Our membership of the euro is a guarantee of monetary stability and creates the right conditions for sustainable growth,” Papademos told lawmakers late Monday at the start of a three-day debate on a confidence motion in his new government, businessweek.com informs. “Our membership of the euro is the only choice.” The German government suggested countries should be allowed to leave the euro if the task of staying in it becomes too tough. The immediate priority for Greece is securing the payment of a EUR 8 bln loan instalment under a previous EUR 110 bln European Union-led rescue, Papademos said. The tranche must be paid before the middle of December to prevent a collapse of the country’s economy. The country and its creditors will start negotiations today in Frankfurt on implementing the debt swap agreement reached at the EU summit last month, the Kathimerini newspaper reported, without saying where it got the information. Greece plans to pay lenders 50 cents for each euro the government borrowed under the terms of the bailout plan. Its 4 percent notes due in August 2013 now trade at 35.5 cents. Fitch Ratings said the agreement with creditors would be a “default event” if implemented, while the International Swaps and Derivatives Association said it won’t trigger credit-default swaps, which are used to insure against non-payment. A small team of officials from the European Commission, the IMF and the European Central Bank is likely to visit Athens soon to discuss matters with the Greek government and political parties, European Commission spokesman Amadeu Altafaj said.

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