Athens: Greece will decide within weeks on whether or not to activate a European Union (EU) and International Monetary Fund (IMF) aid mechanism, Prime Minister George Papandreou told Newsweek.
Athens will start official talks with European officials and the IMF tomorrow to clarify details on the deal which, at an estimated 45 billion euros in the first year, would be the largest such bailout ever attempted if Greece asks for it.
"We will have to make a decision about whether we activate this mechanism in the next few weeks," he was quoted as saying in the magazine's April 16 issue.
"We haven't taken an official decision yet. All we're saying is let's prepare so that if we have to push the button, it's ready," he added.
Spike in borrowing
Investors are increasingly certain Athens will tap the aid after a bid by euro zone leaders to flesh out its details last week failed to rein in a spike in borrowing costs that are complicating Greece's attempts to cut its budget deficit.
The yield on Greek 10-year bonds closed at 7.4 per cent last Friday, three percentage points over pre-crisis levels.
It pushed the difference in yields between 10-year Greek debt and euro zone benchmark German bonds up 15 basis points to 426, close to last week's euro era record of 463.
Papandreou said the aid package was not a bailout and it would give Greece breathing space to move ahead with the necessary reforms.
"It gives us the room to manoeuvre to make the necessary changes to make our economy a viable one," he said.
He also said he thought Greece would have no difficulty borrowing on global markets next month, when Greece must refinance 11 million euros of debt in May.
The first test will be the sale of 1.5 billion euros in short term debt on April 20. The same day, officials will travel to the US to gauge appetite for a dollar-denominated bond, although so far markets say interest has been lukewarm.
