–Greek Prime Minister Could Announce Formal Aid Request Today

FRANKFURT (MNI) – The Greek government will formally request the
joint EMU/IMF aid package by 11:00 GMT, CNBC reported Friday, citing an
unnamed Greek government source.

Similar reports have been circulating this morning, both from Greek
and international media.

Greece’s Finance Minister George Papaconstantinou is scheduled to
hold an off-the-record briefing with reporters in Athens later today
before he leaves for Washington, D.C. to attend the spring meetings of
the IMF and World Bank. There is no press conference currently scheduled
for Papaconstantinou today.

There are rumors in the Greek capital that a formal Greek request
for aid could be announced by the government spokesman or by Prime
Minister George Papandreou himself.

Greek spreads have exploded in the last 24 hours on fears that
Greece was nearing the end of the line and would have to restructure its
debt – or even default. The spread on Greek 10-year bonds rose earlier
today to a whopping 590 basis points above their German Bund
counterparts, an all-time high. But they tightened on reports that
Greece was about to activate the aid package, and were last trading at
+529 basis points — still at a level that makes borrowing in the market
untenable for Greece.

Meanwhile, the Greek government today circulated a paper outlining
the IMF’s basic guidelines for providing aid to Greece. The decision to
make the paper public is believed to be an effort by the government to
suggest that the IMF will not impose impossibly harsh conditions in
exchange for aid.

There have been strikes and protests in Greece over IMF involvement
and over the austerity measures already announced.

The guidelines deal mostly with issues of tax collection, fiscal
discipline and data reporting. It urges “severe penalties for tax
evasion, regular monitoring to ensure that commitments to cut public
sector spending in a number of agencies and offices is followed through,
and regular reporting of fiscal data, including government deficits, on
a monthly and quarterly basis.

There are no specific new expenditure cutting or tax raising
measures mentioned in the paper.

The Eurozone countries have agreed to lend Greece up to E30 billion
in the first year of a three-year assistance program. The IMF would
contribute an additional amount, believed to be in the range of E10
billion to E15 billion. Talks are taking place in Athens among Greek
officials, the ECB, IMF and European Commission over the details of such
aid – including the conditions that will be attached to it.

Disbursing the aid would require unanimous approval of all the
Eurozone countries, which means parliamentary debate and approval in
many cases – including Germany.

[TOPICS: M$X$$$,MX$$$$,MT$$$$,MGX$$$,M$$EC$,M$$CR$]