Greece loan talks begin

April 21, 2010

, ATHENS, Apr 21 – A mission of EU and IMF officials began talks with Greece\’s finance minister on Wednesday on details of an emergency loan mechanism to help the country face its rising borrowing costs.

The officials from the European Commission, the European Central Bank and the International Monetary Fund made no statements as the talks began, an AFP reporter at the finance ministry said.

They are expected to spend around 10 days discussing the technical aspects of the loan.

"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," the finance ministry said in a statement.

The government has said it will not hesitate to call on the EU-IMF backup loan under the terms of a eurozone deal to extend Greece up to 45 billion euros (61 billion dollars) on preferential interest, should it prove necessary.

Greece has been forced to pay rising borrowing costs on the market amid enduring doubts that its debt strategy will work. The government needs to borrow around 10 billion euros next month.

On Tuesday, Athens sold 1.95 billion euros\’ worth of three-month treasury bills but at more than double the cost of its last comparable issue as buyers exacted a high price for their money.

The T-bill auction — the third in a week — comes after the rate of return on Greek 10-year government bonds rose to a record 7.807 percent on Tuesday.

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