Jul 5, 2011

Bloomberg

Greek Banks Ready to Take Part in Rollover, Finance Chief Venizelos Says

By Nicole Itano and Maria Petrakis

Greek banks are willing to roll over their government bonds as part of a European Union rescue plan that will keep the country out of financial markets for three years, Finance Minister Evangelos Venizelos said.

“The Greek banks are ready to participate,” he said in an interview with Bloomberg Television in Athens today. “We must respect absolutely the voluntary character of this procedure. This is very sensitive and I give a very crystal clear answer on this topic.”

EU leaders have called on investors to shoulder part of a new aid package for Greece after last year’s 110 billion-euro ($159 billion) rescue failed to stop the spread of Europe’s debt crisis. Participation by Greek banks and pensions funds is key to the success of a plan for investors to roll over as much as 30 billion euros of maturing bonds into longer-term securities.


Greece must avoid having rating companies cut the country to “selective default,” said Venizelos, who is due to hold talks in Berlin tomorrow with German Finance Minister Wolfgang Schäuble.

“We must take the opportunity but not the risk,” he said. “For us it is very, very important to organize something safe because the Greek problem is always a European problem, a worldwide problem and financial stability in Greece is a key point for financial stability in the euro zone.”

‘Deeper Discussion’

A meeting of euro-area finance ministers on July 11 will be an opportunity for a “deeper discussion” of the rollover plan, he added. That’s the same day Venizelos is due to appoint the board members of an agency overseeing Greece’s 50 billion-euro state-asset sales program, which is key to the country’s second financing package.Discussions on a loan from the EU and the International Monetary Fund, the third part of the new aid package for the country, can only begin after details of private-sector involvement are thrashed out, he said.

Venizelos dismissed criticism of the privatization plan as unrealistic, saying he’s targeting 1.7 billion euros in revenue from state-asset sales by the end of September.

“I can respect the timetable,” he said, referring to his stint as the minister in charge of preparations for the Athens Olympics in 2004. “I can make delivery on time.”

Greece will meet its goal of achieving a primary surplus next year and in following years, which is “the first condition for the reconstruction of our economy and for the return of Greece to the markets as soon as possible,” Venizelos said.

Under the new aid plan, Greece should seek to tap markets for financing in the second half of 2014.

*Related link: Greek Banks Ready to Take Part in Rollover, Finance Chief Venizelos Says

Tags: Interviews