Greece denies fresh loan call

GREECE last night denied that it was seeking a new bailout before its current rescue loans expire as unions prepared to strike today in protest against plans to sell stakes in utility companies.

The general strike has fanned fears that Greece’s ambitious privatisation programme, aimed at raising €50bn (£44bn) by 2015 from selling assets ranging from gaming companies to real estate, is at risk of coming unstuck, adding yet another hurdle to its faltering deficit-reduction plans.

Senior EU and IMF officials make a crucial inspection visit from today to press Greece to do more to clean up its finances, including speeding up its asset sell-off, as thousands of workers walk off the job to protest against austerity. The visit will assess whether Greece’s debt is sustainable and whether it has made enough progress on fiscal reforms to receive a fifth, €12bn tranche of aid under the existing bailout.

Eurozone officials including German chancellor Angela Merkel have said the review of Greece’s progress is key to determining whether it can be given better terms on the current €110bn bailout, or additional aid, to avoid a debt restructuring.

Eurozone markets steadied yesterday amid growing expectations that Greece will receive additional aid to avert an early debt restructuring. But Greek and EU officials said reports that Athens would get a second bailout of €60bn next month were wrong, insisting talks on further assistance were only at an exploratory stage.

European shares rose, while the cost of insuring Greek debt against default fell slightly. But Greece paid an increased yield of 4.88 per cent to sell six-month treasury bills yesterday to refinance maturing debt, higher than last month and well above the 4.2 per cent average rate on its IMF and EU loans.

Meanwhile, Finland yesterday postponed a decision on whether to back the European Union bailout for Portugal, casting fresh doubt over the likelihood of unanimous approval for the €78bn deal when EU finance ministers meet next week.