The IMF advisers began talks with Finance Minister George Papaconstantinou amid great tension on financial markets over Greek strategy to raise funds urgently to fund a massive budget deficit and redeem old debt falling due.
At Credit Agricole CIB, analyst Stuart Bennett said that the euro continued to be undermined by the situation in
The International Monetary Fund experts are officially on a mission to advise ministers on how to manage budget cutbacks and clamp down on tax fraud in line with targets imposed by the European Union.
"During this technical assistance visit, the IMF is expected to analyse and make suggestions on budget and tax issues," the finance ministry said.
The IMF mission was requested by
But at the same time the market interest rates it has to pay on its debt have jumped up, soaking up much of the intended savings.
The rate or yield, which had leapt to slightly above 7.0 percent on Tuesday, eased on Wednesday to 6.883 percent.
This is still sharply above the level
"The strong rise in yields raises concerns about the cost of debt for
At Capital Economics in
And at Goldman Sachs, chief European economist Erik Nielsen described a muddle of information on the markets on Tuesday as "terrible news" and warned of possibly "very troublesome days."
Prime Minister George Papandreou was to issue new warnings about the situation to a cabinet meeting on Wednesday, Greek media reported.
There is also concern that
The finance ministry has already been forced to revise its estimate on the economy\’s shrinkage in 2009 from 1.2 percent to 2.0 percent.
On April 22, the European Union\’s statistical agency Eurostat is expected to announce that
The Greek finance minister on Tuesday acknowledged that the deficit figure will likely be higher but said that the revision would be small.
"We are not talking about major changes," he told Mega television, suggesting a revision of less than a percentage point.
"Our goal is to cut (the deficit) by four percent. We have taken measures worth (a reduction of) 6.4 percent," he said.
The IMF experts got down to work a day of drama on financial markets driven by many and varied reports of Greek strategy to find urgent funding of a huge public deficit.
One report, belatedly denied by the authorities, suggested that
In February and March,
The EU eventually came up with a vague potential safety net which would involve the IMF, but there is widespread uncertainty about if, when and how it might come into force.