April 15, 2011
Greece plans to carry out 76 billion euros ($110 billion) in austerity measures and state- asset sales to meet budget-deficit goals as Prime Minister George Papandreou vowed the country won’t restructure its debt.
Greece will enact 26 billion euros in deficit cuts and 50 billion euros in asset sales through 2015, the Finance Ministry said today in an e-mailed statement from Athens. The measures will cut the deficit to near 1 percent of gross domestic product by 2015, from a targeted 7.4 percent this year, Finance Minister George Papaconstantinou said.
Papandreou is trying to convince investors that the country won’t have to renege on its debts after getting a 110 billion- euro bailout last year from the European Union and the International Monetary Fund. Greek bond yields have soared to a record after a German official said that Greece may have to renegotiate its debt burden.
The extra yield investors demand to hold 10-year Greek debt instead of benchmark German bunds widened to 1,043.63 basis points as of 3:20 p.m. in London today, the most since before the euro’s debut in 1999. The yield on the Greek 10-year bond rose 54 basis points to 13.82 percent.
“Greece’s problems won’t be solved by restructuring its debt but by restructuring the country,” Papandreou said earlier today at a Cabinet meeting in comments broadcast by state-run Net TV. “Even if with the wave of a wand the debt disappeared, Greece in a few years would have debts again without these reforms.”
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