THE NEW YORK TIMES: ATHENS — Describing his country’s economy as “a sinking ship,” the Greek prime minister formally requested an international bailout on Friday, an unprecedented step that will test the bonds of the European Union.
In a nationally televised address, Prime Minister George Papandreou said two waves of austerity measures introduced by the government over the past few months “had failed to convince the markets” that Greece would get its finances under control or be able to avert defaulting on a mountain of debt.
“There is the risk of the sacrifices of the Greek people being lost as rates of borrowing continue to rise,” he said, speaking from the Aegean island of Kastellorizo.
“The time has come for us to ask our partners in the E.U. to activate the mechanism we formulated together,” he said, referring to an emergency aid package arranged two weeks ago. The plan foresees up to €30 billion, or $40 billion, in loans from Greece’s euro-zone partners, as well as up to €15 billion from the International Monetary Fund.
The activation of the E.U.-I.M.F. rescue plan, Mr. Papandreou said, “will send a strong message to the markets that the E.U. is not playing their game and will not leave its currency at risk.”
The announcement means that funding from the I.M.F. can be expedited once the board of the fund has approved the terms. The fund is expected to provide €12 billion, according to E.U. officials.
“We are prepared to move expeditiously on this request,” Dominique Strauss-Kahn, the I.M.F. managing director, said in a statement issued in Washington. >>> Niki Kitsantonis and Matthew Saltmarsh | Friday, April 23, 2010
