No bailout loans for Greece ahead of economic overhaul
Published 25/04/2010 | 05:00
GLOBAL finance officials are sending drowning-in-debt Greece a tough love message: no emergency loans unless the country adopts an economic austerity overhaul.
The escalating crisis was expected to dominate discussions as finance ministers on the steering committee of the 186-nation International Monetary Fund (IMF) held a daylong meeting as part of its regular spring gathering with the World Bank.
Greece's finance minister, George Papaconstantinou, planned meetings with the IMF's managing director, Dominique Strauss-Kahn, as well as US Treasury Secretary Timothy Geithner and officials from Russia and Brazil.
Crippled by soaring borrowing costs, Greece triggered an emergency aid plan on Friday to draw cash from the IMF and eurozone. There's enough money in the package to prevent Greece from defaulting on its debts.
Eurozone members will contribute €45bn, while the IMF will provide €15bn this year.
Greece is putting in place an austerity programme that cuts civil servants' pay, freezes pensions and raises taxes. But the country faces years of painful cutbacks and doubts about its long-term finances.
Despite Greece's deepening problems, global financial leaders said the world's economy is recovering faster than expected from the worst recession in decades.
Meanwhile, the G20 members papered over sharp differences in proposed new taxes on banks to keep taxpayers from being saddled with the cost of future financial bailouts and to restrain the kind of excessive risk-taking that led to the crisis.
The goal is to present a plan to G20 leaders when they meet in late June in Canada.