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Greece secures short-term finance | Greece secures short-term finance |
(about 3 hours later) | |
The Greek government has managed to sell 4.06bn euros ($5.15bn; £3.24bn) of treasury bills, which are very short-term bonds. | The Greek government has managed to sell 4.06bn euros ($5.15bn; £3.24bn) of treasury bills, which are very short-term bonds. |
It sold the one-month bills at an interest rate of 3.95% and the three-month bonds at 4.2%. | It sold the one-month bills at an interest rate of 3.95% and the three-month bonds at 4.2%. |
The money is needed to cover 5bn euros of old treasury bills, which are due for payment on Friday. | The money is needed to cover 5bn euros of old treasury bills, which are due for payment on Friday. |
Greece needs to raise the money this way because it has not yet received the next tranche of its bailout loans. | Greece needs to raise the money this way because it has not yet received the next tranche of its bailout loans. |
The remaining 940m euros needed will be raised over the next few days, but not through auctions. | The remaining 940m euros needed will be raised over the next few days, but not through auctions. |
Eurozone ministers agreed earlier in the week to give Greece two more years, until 2016, to meet its deficit-reduction targets. | Eurozone ministers agreed earlier in the week to give Greece two more years, until 2016, to meet its deficit-reduction targets. |
But they delayed a decision on releasing the latest 31.5bn-euro tranche of bailout funds. | But they delayed a decision on releasing the latest 31.5bn-euro tranche of bailout funds. |
The ministers will meet again on 20 November to discuss releasing the latest instalment of bailout funds. | The ministers will meet again on 20 November to discuss releasing the latest instalment of bailout funds. |
Greece had been pushing for the funds to be released after passing a tough budget for 2013, including further cuts to pensions and wages, in a vote on Sunday night. | Greece had been pushing for the funds to be released after passing a tough budget for 2013, including further cuts to pensions and wages, in a vote on Sunday night. |
The interest rate paid on the three-month bills was slightly lower than at the last auction, when the rate was 4.24%. There was no comparable rate for the one-month bills. | The interest rate paid on the three-month bills was slightly lower than at the last auction, when the rate was 4.24%. There was no comparable rate for the one-month bills. |
Avoiding default | Avoiding default |
Demand for the three-month bills was slightly down on the last auction, with coverage of 1.66 times, down from 1.90 in October. | Demand for the three-month bills was slightly down on the last auction, with coverage of 1.66 times, down from 1.90 in October. |
The debt that needs to be repaid on Friday was incurred at an auction of three-month bills in August. That auction, in turn, was also needed to avoid a default, because of delays in the payment of bailout loans from the troika of the European Central Bank, International Monetary Fund and European Union. | The debt that needs to be repaid on Friday was incurred at an auction of three-month bills in August. That auction, in turn, was also needed to avoid a default, because of delays in the payment of bailout loans from the troika of the European Central Bank, International Monetary Fund and European Union. |
The latest 31.5bn-euro tranche will have to be approved by some national parliaments, including Germany's. | The latest 31.5bn-euro tranche will have to be approved by some national parliaments, including Germany's. |
There is a continuing debate in Europe about whether, in addition to giving Greece extra time to reduce its deficit, it should also get extra time to cut its debt. | There is a continuing debate in Europe about whether, in addition to giving Greece extra time to reduce its deficit, it should also get extra time to cut its debt. |
The deficit is the amount of money it is spending in a year over and above what it is earning through taxation, while the debt is the total amount it owes. | The deficit is the amount of money it is spending in a year over and above what it is earning through taxation, while the debt is the total amount it owes. |
Some eurozone finance ministers have argued that Greece should be allowed until 2022 to reduce its debt to 120% of its GDP, which is the total amount produced by the economy. | Some eurozone finance ministers have argued that Greece should be allowed until 2022 to reduce its debt to 120% of its GDP, which is the total amount produced by the economy. |
But the International Monetary Fund has said that the existing deadline of 2020 should remain. | But the International Monetary Fund has said that the existing deadline of 2020 should remain. |
"We clearly have different views," IMF chief Christine Lagarde told a news conference on Monday. "What matters at the end of the day is the sustainability of the Greek debt." | "We clearly have different views," IMF chief Christine Lagarde told a news conference on Monday. "What matters at the end of the day is the sustainability of the Greek debt." |