Greek bond proposal shot down
ATHENS: Greece floated a proposal to roll over ?4.5 billion (RM19.41 billion) in debt next year fill a budget gap on Monday, which has sparked concerns that Athens will need a new bailout, but a senior European Central Bank (ECB) official immediately ruled out such a move.
Speaking ahead of a meeting of eurozone finance ministers in Luxembourg, European Central Bank executive board member Joerg Asmussen said there was "no way" the gap could be covered by bond rollovers.
"There is a financial gap for the second half of 2014 of about ?5 billion to ?6 billion," Asmussen said. "There is no way it can be covered by bond rollovers (which could contravene ECB law)," he said.
Instead, he urged Greek authorities to find alternative means to cover the shortfall, such as through the state's privatisation programme.
Speaking to business daily Naftemporiki, Finance Minister Yannis Stournaras had earlier said the operation would allow Greece to meet ?4.4 billion in 2014 loan repayments that European Union-International Monetary Fund creditors are worried the country cannot afford.
The impending financing hole, which could rise to ?10.9 billion by 2015, is a big concern to the so-called troika of creditors - the EU, ECB and IMF- which are deciding on further loan releases to the cash-strapped Greek government.
But with state revenue still far short of planned spending, the Greek government is also looking for ways to afford day-to-day spending in 2014 without forcing more austerity on Greeks living through a sixth year of recession. AFP