The FINANCIAL — (ATHENS) – Greece heads for another audit of its battered finances this week. It happened after European officials closed ranks to quash fears of an inglorious Greek exit from the euro cited in a German online report.
Team of experts from the EU, the IMF and the European Central Bank will pore over plans by Greece. This will help for three years bring down the country’s debt and economize 26 billion Euros during this period.
"The mission will begin on Tuesday," a finance ministry source said.
Socialist-led Greece is under pressure to deliver on a painful overhaul of its parlous economy after taking a 110-billion-euro ($157-billion) bailout loan from the EU and the International Monetary Fund last year.
The delivery of a 12-billion-euro installment from that loan hinges on the audit but Greece so far has struggled to meet its deficit-reduction targets because of a deeper-than-expected recession at home.
According to the finance ministry, with Athens increasingly likely to need more help to meet its debt repayments from 2012, euro zone ministers met unofficially on Friday to "plan the next steps" in the face of market skepticism.
Last week, German daily Der Spiegel reported that the Greek government decides to leave the Euro-zone.
Other news reports said the eurozone officials had debated milder recovery terms for Athens that could include an extension of debt repayment and more time to meet deficit reduction goals.
Greece currently has a debt of 340 billion euros.
Without naming its source, French business daily Les Echos said Saturday that Greek Finance Minister George Papaconstantinou had secured tacit acceptance that Greece's political backers could make another 20-25 billion available if more cuts and accelerated state sell-offs failed.
In past weeks, a number of prominent Socialists including the head of the parliamentary economic oversight committee and a former prime minister have spoken in favour of debt restructuring, a move rejected by the government.
Labour Minister Louka Katseli, an economist and former OECD official, joined the fray on Sunday in statements to Eleftherotypia daily, favouring a repayment extension over a debt haircut.
A 'haircut' is a form of restructuring that entails losses for debt holders.
"Any logical person would agree…with a possible payment extension or a reduction in the cost of borrowing," Katseli said