By the 19th of May, the Greek government is scheduled to repay a 8.4bn euro loan to investors; it comes at a time where the economy is struggling to cope with mounting interest on spiralling loans. Discussions between Greece's finance ministry, the European Commission and the IMF are aiming to find a solution to the problem. Greece is finding it difficult to solve its 300bn euro debt over the next three years. The country aims to arrange a deal for a swift 40bn euro payout from the IMF and Eurozone members.
In a recent statement, Greece's finance ministry said: "The discussions concern a three-year programme of economic policies, which can be supported with financial assistance from eurozone members and the International Monetary Fund should Greek authorities decide to request the activation of the mechanism."
A handful of eurozone members have pledged 30bn Euros with the remaining 10bn from the IMF. The discussions aim to clarify the exact terms, conditions and interest rates if the aid is agreed. However 40bn Euros might not be enough as speculated by many experts. Rumours that a minimum of 80bn Euros would be required to simply avoid defaulting on previous loans were denied by Axel Weber of the European Central Bank Governing Council.
The Greek government has been hit by rising borrowing costs as lenders demand a higher return on providing money to repay existing debts. Athens was able to raise almost 2bn Euros by selling three month treasury bills but although the fund-raising was successful, the interest rate was 3.65%, more than twice the level of loans secured in January.
Before the end of May, Greece will need to raise about 11bn Euros and a further 35bn Euros during 2010 to cover its costs such as public service pensions. Leading economic experts throughout Europe have warned that coming to Greece's aid and subsequently bailing them out with a 'blank cheque' could have damaging effects on the economy of that country.
In a recent statement, Greece's finance ministry said: "The discussions concern a three-year programme of economic policies, which can be supported with financial assistance from eurozone members and the International Monetary Fund should Greek authorities decide to request the activation of the mechanism."
A handful of eurozone members have pledged 30bn Euros with the remaining 10bn from the IMF. The discussions aim to clarify the exact terms, conditions and interest rates if the aid is agreed. However 40bn Euros might not be enough as speculated by many experts. Rumours that a minimum of 80bn Euros would be required to simply avoid defaulting on previous loans were denied by Axel Weber of the European Central Bank Governing Council.
The Greek government has been hit by rising borrowing costs as lenders demand a higher return on providing money to repay existing debts. Athens was able to raise almost 2bn Euros by selling three month treasury bills but although the fund-raising was successful, the interest rate was 3.65%, more than twice the level of loans secured in January.
Before the end of May, Greece will need to raise about 11bn Euros and a further 35bn Euros during 2010 to cover its costs such as public service pensions. Leading economic experts throughout Europe have warned that coming to Greece's aid and subsequently bailing them out with a 'blank cheque' could have damaging effects on the economy of that country.
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