Is Greece on the verge of bankruptcy?

Is Greece on the verge of bankruptcy?

WASHINGTON: The International Monetary Fund said Monday it is sending a mission to Athens this week for talks on helping debt-stricken Greece overcome its financial crisis.

The mission, at the request of the Greek authorities, would begin Tuesday and last for about a week "to explore possibilities for technical assistance from the IMF in the coming months on pension reform, tax policy, tax administration, and budget management," the fund said in a statement.

"The mission is within the context of the regular surveillance that the IMF provides to its membership," the brief statement said.

A Greek finance ministry official said there would be no talk of a loan.

"We have invited them to help us with their technical know-how, notably for the reform that we have launched to draft the budget," the official told AFP on condition of anonymity.

"A loan is not being discussed," the official said.

The IMF delegation will begin discussions with Greek officials from various ministries on Wednesday, the source said. Greece has turned to IMF experts several times before for advice, including on measures to fight tax fraud. The IMF mission comes after experts from the European Commission and the European Central Bank met with Greek officials during a three-day visit last week to examine the country's public finances.

Both the ECB and Spanish presidency of the European Union have warned that Greece should not expect a bailout from the bloc.

Greece, which has acknowledged that it has a credibility problem with the financial markets, has come under pressure from the European Union to clamp down on its ballooning public deficit.

Greece, whose public spending deficit rose to 12.7 percent of output last year and debt climbed to 113 percent of gross domestic product (GDP), must present its crisis program to the EU by the end of the month.

The Socialist government has said it will get the deficit down to 8.7 percent in 2010 by cutting government spending and fighting tax fraud. It aims to bring it to below 3.0 percent of GDP, the limit imposed by the eurozone, in 2012.

The government on Friday announced a 20 percent increase in tobacco and alcohol taxes and a higher inheritance tax as it fended off EU pressure for drastic action to tackle its debt mountain.

Finance Minister Georges Papaconstantinou announced the tax hikes as he reaffirmed the need for the country to establish financial credibility in Europe where Greece's troubles have raised concerns about the eurozone's stability.

The EU and the IMF already have acted jointly to help two EU members to cope with sharp downturns amid the global economic crisis: Hungary in November 2008 and Latvia the following month.

Papaconstantinou told the Italian newspaper Il Sole 24 recently that "we will solve our fiscal problems alone."

"We have not asked for, and do not expect any help from the European Central Bank or a member state from the European Union", he said.

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