ATHENS (MNI) – The Greek government Friday requested that the aid
plan offered jointly by its Eurozone partners and the International
Monetary Fund be formally activated, Prime Minister George Papandreou
announced moments ago.
The move had been widely expected with Greek bond yields soaring to
record levels in the last 24 hours, making borrowing for the government
untenably expensive.
“A few minutes ago I asked the finance minister to officially
request the activation of the [aid] mechanism,” Papandreou said in a
brief televised statement from the Greek island of Kastellorizo, where
he is visiting.
Papandreou said that requesting the aid had become “imperative and
of national importance.”
He did not specify whether there would be separate requests to the
EMU and to the IMF, and he provided no specifics about how the aid would
work or what the conditions on it would be. A briefing on the matter by
the Greek Finance Ministry is scheduled for 10h45 GMT.
The prime minister made clear that the decision to request aid now
was driven by the very recent sharp rise in spreads on Greek debt.
“The Greek government had hoped that agreement on the Eurozone aid
mechanism would have been enough” to bring spreads down and for “markets
to calm down.” However, “markets have not responded, either because
they did not fully believe the Eurozone plan or because” of profit
seeking motives, Papandreou said.
He said recent market events left no choice other than to activate
the mechanism. “High interest rates are jeopardizing our efforts,”
Papandreou said. “We will not allow this.”
He added: “The markets did not give us any time.”
The prime minister said Greece has now embarked on a “new Odyssey,
but the ship will be rebuilt now with stronger material and Greece will
reach its target safely and more sure.”
Through reform and restructuring, Papandreou said, Greece would
work its way out from under the strict surveillance and control of its
European partners.
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