Greek minister says IMF debt talks are 'going well'

IMF chief Strauss-Kahn praised the efforts of the "courageous" Greeks Greece's talks with the IMF on emergency loans to finance its debt are going well, its finance minister says. George Papaconstantinou said Greece would not face problems funding its debts, which have undermined the euro. He was speaking after talks with IMF chief Dominique Strauss-Kahn, who said he was impressed with Greece's determination to tackle the crisis. On Friday Greece called for emergency funding from the IMF and its eurozone partners. Eurozone nations are expected to provide emergency loans of up to 30bn euros ($40bn; £26bn) in the first year, with a further 10bn euros coming from the International Monetary Fund (IMF). Greece will need some of the money before 19 May, when it faces a debt payment of $11.3bn. 'Courageous' Mr Papaconstantinou said it was unthinkable that Greece would leave the Euro zone. For all Greece's insistence that a deal will be done very soon, the obvious distaste in Germany about a rescue just won't go away.

Chancellor Angela Merkel is on board - though only because the alternative looked even more dangerous.

The stability of the Euro area and the German banks which hold Greek government debt was too much of a concern.

Andrew Walker

BBC economics correspondent

Greek deal takes shape He said: "We are all confident that this will be done in time and we will be able to continue to finance Greek public debt without any problem." Mr Strauss-Kahn said everyone involved in the rescue plan was aware of the need for swift action, and he was optimistic of a speedy result. "I am confident that we will conclude discussions in time to meet Greece's needs," he said in a statement. He praised the efforts of the Greek people, which he said were "courageous". But French and German politicians have raised concerns about Greece's debt problems. The French economy minister, Christine Lagarde, told the French newspaper Journal du Dimanche that the EU would come down hard on Greece if it failed to act responsibly: "In the case of default on repayment, we will immediately put the foot on the brake." Germany's finance minister, Wolfgang Schaeuble, also said aid should not be taken for granted, but was conditional on prudent behaviour. He told the mass-selling Bild newspaper no firm decision had been taken and any loan depended "entirely on whether Greece continues in the coming years with the strict savings course it has launched". Opposition to aid for Greece runs deep in Germany. Bild recently wrote a so-called open letter to Greece asking whether Germans went to work such long hours and for so many years simply to let Greeks retire in their 50s. On board Mr Papaconstantinou said he believed Germany would agree to help: "They are completely on board on the need for a framework of conditionality and fully supportive of a decision that Germany has co-signed at the level of heads of state and government and at the Euro group level." He promised to meet all obligations, and suggested his country could raise funds by embarking on a privatisation programme. "There are many options that will allow us to gain by reducing the stake in public companies. The Greek state has an enormous number of real estate assets, over hundreds of billions. " He also had a warning for those investors who were betting that Greece would default. "All I can say is they will lose their shirts," he said.



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