Market Watch
April 15, 2011
The Greek government on Friday promised to further tighten its belt in order to cut its deficit and rein in growing public debt, but did little to stave off growing fears Athens may need to seek a restructuring of its debt.
The 26 billion euros ($37.7 billion) worth of additional austerity include €15.6 billion in spending cuts and €10 million in revenue measures, analysts said. Greece also said it would proceed with previously outlined commitments to raise €50 billion through asset sales by 2015.
Greece aims to cut its deficit to 1% of gross domestic product in 2015 from a goal of 7.4% this year.
Greek Prime Minister George Papandreou on Friday reiterated that the country wouldn’t restructure its debt.
“These rumors over debt restructuring must stop,” he said, in a speech. “We know how to manage our debt.”
But persistent speculation that Greece may move to restructure kept Greek government bonds under heavy pressure, sending the yield on 10-year bonds above 13% this week.
Greece was forced out of credit markets last year in the first chapter of the euro zone’s sovereign-debt crisis, receiving a €110 billion bailout from the European Union and the International Monetary Fund. Ireland and Portugal subsequently joined Greece in seeking aid.
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