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Greece Finds ways of Filling Financial Hole

Greece is limping through its fifth year of economic turmoil rather indecisively and, up until now, has seen only limited results in return for the efforts expended by the nation.

The country is still in talks with its lenders regarding further deficit cutting austerity measures but dithering has taken the place of decisive action.

However, in a document released today Deputy Finance Minister Christos Staikouras has commented that in order to fill a financial hole that has the potential to deepen in future years Greece may try to raise supplementary short-term debt and could even ask for a rollover of its European Central Bank-held bonds.

The Greek coalition government previously confessed that when it comes to meeting the conditions of its bailout the struggling nation is way off target. EU officials have consequently commented on the increasing likelihood of Greece requiring a second debt restructuring.

With a solution to the Eurozone crisis still far from assured it’s more than possible that Greece’s privatisation revenues or budget gap could fail to meet the targets laid out in the nation’s second bailout. According to Staikouras, if that occurred Greece could face a financial gap of an unspecified size.

Staikouras asserted that a possible solution for bridging the void could be extending the ECB held maturities of Greek debt, even though up until now the central bank has refused to face any losses on its bond purchases. Staikouras is quoted as saying: ‘With a view to covering the financial gap, and given that the Euro system is holding 28 billion Euros of Greek bonds maturing in 2013-2016 , the possibility of rolling over the maturities will be examined […] within the framework and legal restrictions of the EU’s Lisbon Treaty’.

Staikouras added that Greece may have to raise more money than the 10.6 billion Euro’s foreseen under the nation’s present bailout conditions from debt markets in 2015 and 2016.


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