European finance ministers will try to plug a 15 billion-euro ($19-billion U.S.) hole in Greece’s finances and win over the International Monetary Fund in the latest installment of three years of debt-crisis brinkmanship.
Recycling European Central Bank profits on Greek bonds, charging Greece lower interest rates and extending repayment deadlines are among the options under consideration today for filling the new gap in Greece’s public accounts.
European governments tore open the hole last week, by giving Greece two extra years to cut its budget deficit. The required extra financing provoked a clash with the IMF, since it would add to Greece’s debt load instead of reducing it.
Officials said today’s meeting, in Brussels, won’t make a final decision to release the next tranche of aid to Greece, partly because parliaments in Germany, the Netherlands and Finland have yet to weigh in.
The "troika" representing creditors also has to certify that Greek Prime Minister Antonis Samaras’s coalition government has delivered economy-boosting steps ranging from improvements to tax collection to the deregulation of closed professions.
The meeting comes a day after France lost its top credit rating with Moody’s Investors Service, increasing pressure on President Francois Hollande to find ways to bolster growth in Europe’s second-largest economy.
France was cut to Aa1 from Aaa, the rating company said. The Moody’s downgrade follows one by Standard & Poor’s in January.
The euro slid versus most of its 16 major counterparts after the Moody’s action renewed concern the currency bloc’s debt crisis is deepening. The 17-nation euro continued to slide today, dropping 0.2% to $1.2787 U.S. as of mid-morning in Brussels.
Greek 10-year bonds were higher for an eighth day amid expectations that creditors will keep money flowing to the Athens government. The yield on security maturing in February 2023 fell six basis points to 17.17%.
One option is to deliver about 44 billion euros to Greece in December, by bundling 31.5 billion euros on hold since the middle of the year with two other tranches due before year-end, German Finance Minister Wolfgang Schaeuble said after the ministers failed to finalize the financing last week.
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