Monday, June 20, 2011

Lenders head to Greece as Europe holds back loan

Reuters
June 20, 2011

International lenders are making an unexpected visit to Athens after euro zone countries piled pressure on Greece not to backslide on painful reforms that have caused public outrage.

The team of European Union and International Monetary Fund (IMF) inspectors will visit as parliament holds a confidence vote on Tuesday night on Prime Minister George Papandreou's new cabinet, formed to stiffen resolve behind austerity measures to win new loans and avoid bankruptcy.

Officials said the inspectors would visit on Tuesday and Wednesday. Greek government spokesman Ilias Mosialos said they would discuss changes "at a technical level" to a five-year package of spending cuts, tax hikes and public company selloffs that have touched off weeks of strikes and protests.

The new plan almost doubles existing belt-tightening measures that have helped drive unemployment to a record 16 percent and extended a deep recession into its third year.

Mosialos tried to dampen fears of backsliding that have unsettled international markets by saying there would be no change in the economic policy mix in the plan and only improvements in set fiscal targets would be possible.

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