Greece insists on temporary funding to give time for reforms

PUBLISHED ON FEB 7, 2015 2:09 AM    www.google.com/+EricAu118

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Greek Finance Minister Yanis Varoufakis speaks to reporters as he arrives to meet a US delegation in Athens Feb 6, 2015. -- PHOTO: REUTERS

ATHENS (AFP) - The Greek government will insist in negotiations with its EU creditors on reaching a deal on temporary funding before it presents a long-term agenda for renegotiating the country's foreign loans, a government source said Friday.

This should include €1.9 billion (S$2.9 billion) in profits made by the European Central Bank from holding Greek government bonds, the source said.

"The bridge programme... is an official expression of the will of all sides to negotiate without pressure and blackmail," the source said, referring to the temporary funding deal.

"The government believes that time must be given to the negotiation to reach a result successful for both sides," the source added.

Greece also wants to be allowed to issue more short-term bonds to cover its financing needs, asking the ECB to raise its annual limit of €15 billion.

A new auction of three-month treasury bills has been announced for Feb 11, the day when euro zone ministers are scheduled to hold an emergency meeting on Greece.

The details of the government's plans emerged as Prime Minister Alexis Tsipras prepared to announce the agenda of his anti-austerity government in parliament on Sunday.

Greece's euro zone partners on Friday gave the new Athens government five days to come up with a plan to renegotiate its foreign loans, after a week of intense EU meetings failed to secure a breakthrough.

The EU portion of Greece's €240 billion EU-IMF bailout is due to expire Feb 28, leaving just weeks for Athens and Brussels to reach a compromise or risk a default that could send Greece crashing out of the euro.

In more bad news for the Greek economy on Friday, ratings agency Standard and Poor’s downgraded Greece to B-, one notch above the range that indicates vulnerable to default.