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Europe weighs options for new Greek package
Date 31/05/2011 16:35  Author webmaster  Hits 1109  Language Global
31 MAY 2011

• European finance officials discuss Greece in Vienna
• "Vienna Initiative" private sector role eyed
• Euro rises on optimism over new Greek aid package


By Noah Barkin

BERLIN, May 31 (Reuters) - Europe stepped up efforts to draft a second bailout package for Greece on Tuesday, with private sector participation still seen as an option to help relieve the country of its massive debt burden.

Senior EU finance officials were meeting in Vienna to prepare the ground for high-level negotiations on the Greek debt crisis, and sources said a range of policy steps were on the table, including a "Vienna Initiative"-style debt rollover and bond maturity extensions.

Greece faces a funding gap of over 60 billion euros in 2012 and 2013. Any private sector involvement is likely to form part of a broader package of measures to fill that hole, including aggressive privatisation, fresh austerity pledges from Athens and new aid from the European Union and the IMF.

Ratings agency Fitch said in a report on Tuesday that Greece's ability to deliver on its fiscal promises in the face of rising opposition from the public and political opposition was "increasingly in doubt".

But a Greek newspaper reported that a team of inspectors from the European Commission, European Central Bank and International Monetary Fund in Athens had agreed with the government on a cut in value-added tax (VAT) as a means of securing broader consensus for the steps.

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