Greek stocks close down 4 per cent on bailout jitters

ATHENS (AFP) - The Greek stock exchange closed down 4.02 per cent on Wednesday ahead of an emergency meeting of euro zone finance ministers during which the country will unveil controversial proposals to overhaul its bailout.

The benchmark index had dropped into the negative shortly after opening and Prime Minister Alexis Tsipras’s announcement that the OECD is ready to help draft a reform programme to boost growth failed to cheer investors.

Tsipras has said he will not bow to demands to complete a loan agreement with the EU and the IMF before rethinking the terms of the 240 billion euro (S$370 billion) bailout that Greece accepted during Europe’s debt crisis.

Finance Minister Yanis Varoufakis was in Brussels Wednesday to present a 10-point plan aimed at securing stop-gap financing that would tide the country over while it negotiates new terms to be put in place from Sept 1.

Back in Athens, the PM met with OECD chief Angel Gurria and announced plans to work together to draw up an alternative programme which Tsipras said would be based on policies aimed at alleviating financial misery.

According to Berenberg financial analysts, “a bigger role for the OECD in designing and policing supply-side reforms is positive.”

“But refusing to honour 30 per cent of the commitments which were the basis for Europe and the IMF lending Greece 240 billion euros, insisting on a much higher minimum wage for young people while youth unemployment is close to 50 per cent and re-instating the stranglehold of bolshie trade unions over the labour market look like non-starters.”