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Is a Greek Exit from the Euro Inevitable?

Posted by Admin on May 22, 2012

http://business.time.com/2012/05/21/is-a-greek-exit-from-the-euro-inevitable/

Is a Greek Exit from the Euro Inevitable?

By Michael Schuman | @MichaelSchuman | May 21, 2012

Kostas Tsironis / AP

For 2½ years, the world has been watching and waiting to see if debt-laden Greece can remain in the euro zone. Many have been doubtful since the beginning of the debt crisis. Greece’s government debt is simply too burdensome, the fiscal adjustment imposed on Athens is too severe, the Greeks are too resistant to the tough reforms that are necessary and the rest of Europe is too bullheaded to change its approach to suit reality. But for 2½ years, Greece has nevertheless managed to scrape by and remain in the monetary union, thanks to two European Union–IMF bailouts (totaling $300 billion), which have kept Greece on life support, and repeated promises to reform by Greece’s major political parties.

Now, however, the Greek debt crisis may finally be reaching the endgame. The likelihood of a Greek exit from the euro zone has been growing, and that has scary consequences for the rest of Europe as well as the global economy.

(PHOTOS: Protests in Athens)

The spiral toward disaster has been tipped off by Greek politics. A general election earlier this month eliminated what little hope remained that Athens could press through with the painful austerity measures and structural reforms demanded by the euro zone in return for bailout cash. The fractured result made it impossible for a government to form, and a new election has been called for June 17. But even if that poll brings some political stability, the odds that the bailout can go ahead as planned are practically zero. A vast majority of the votes in the last election went to parties that either want to renegotiate the terms of the bailout or ditch the agreement entirely. Whether the bailout scheme can continue will depend on the willingness of the rest of Europe to make concessions to Greece in a better, softer rescue agreement and the willingness of Athens’ politicians to agree to new terms. These are very open questions.

The problem is that without that rescue money, Greece will very likely have to exit the euro zone. The Greek government would quickly run out of money to function, leaving Athens no choice but to return to its national currency, the drachma. This scenario could unfold with surprising speed. Here are Bank of America/Merrill Lynch analysts on that score:

If no government is in place before June, when the next instalment from the EU/IMF is due, we estimate that Greece would run out of money sometime between the end of June and early July, at which point a return to the drachma seems to us inevitable.

Even if the Greek government gets its act together and the bailouts continue, there is another force steadily pushing Greece out of the euro zone. Greeks are removing their deposits from Greek banks. They have been doing this for a while, but the pace seems to have accelerated recently. In just one day last week, Greeks yanked some $900 million of deposits from the banks. This process is quaintly called a “bank jog,” but it is much more dangerous than a quiet run through a park. It is effectively a slow-motion run on banks, and a natural consequence of the uncertainty surrounding Greece’s tenuous position in the euro zone. If Greece is forced to ditch the euro and return to the drachma, Greeks know full well that their drachmas will be sharply devalued relative to the euro. So keeping their money in Greek banks now could result in a big hit to their welfare. Instead of facing that risk, Greeks are withdrawing money from banks to preserve their wealth.

(MORE: After the Fall: Greece’s Former Prime Minister Assesses the State of His Nation)

That makes sense from the standpoint of the Greek saver, but not for the banking sector. As Greek banks empty of euros, the financial system comes closer to failure. So far, the European Central Bank has been plugging the hole by acting as a lender of last resort to the Greek banking system. But there is a limit to how much financing the ECB might be willing to inject. Gavyn Davies of the Financial Times did a great job of explaining how this bank run is happening, and why the ECB could eventually fail to contain it:

The problem is that [ECB support for Greek banks] potentially exposes the ECB to much bigger losses than anything which has been contemplated so far by the core economies. Up to now, the ECB has been willing to inject liquidity to cover the financing needs of the periphery banks as the inter-bank market has dried up. If instead, they have to contemplate providing semi-permanent funds to cover large further withdrawals of bank deposits, the size and timescale of the injection becomes extraordinarily large.

If the ECB doesn’t continue to finance Greek banks, Athens could be forced to withdraw from the euro zone and restore its currency. That on its own would be destabilizing. But even more worrisome, the bank jog in Greece has the potential to become a euro zone–wide bank run. Seeing what’s going on in Greece, depositors in other weak euro-zone economies (Portugal, Spain, Italy) have the same incentive to yank money out of their banks. That could end with the total unraveling of the monetary union. The fears that this theoretical scenario will become reality are increasing in Europe. Here’s how economist Paul Krugman explained it in the New York Times:

Right now, Greece is experiencing what’s being called a “bank jog” — a somewhat slow-motion bank run, as more and more depositors pull out their cash in anticipation of a possible Greek exit from the euro. Europe’s central bank is, in effect, financing this bank run by lending Greece the necessary euros; if and (probably) when the central bank decides it can lend no more, Greece will be forced to abandon the euro and issue its own currency again. This demonstration that the euro is, in fact, reversible would lead, in turn, to runs on Spanish and Italian banks. Once again the European Central Bank would have to choose whether to provide open-ended financing; if it were to say no, the euro as a whole would blow up.

(MORE: Will Greece Need Another Election to Form a Government?)

How can the euro zone stop this from happening? It will require a degree of political commitment and policy flexibility so far absent from the zone’s approach to the debt crisis. When a national government confronts a run on banks, the way to solve it is to guarantee deposits and ensure that banks have enough cash to meet withdrawals. The problem with the euro is that individual national governments don’t have control over their own money. So the euro zone as a whole has to step in and back up the banks like a national government would. The euro zone likely requires some sort of guarantee scheme akin to the U.S.’s Federal Deposit Insurance Corp. But supporting the euro banking system is this way might demand yet more resources from stronger euro-zone economies like Germany. It would also probably entail more E.U.-level control over national banking sectors. Both steps would prove difficult.

More broadly, Europe can squelch the bank jog if it shows more commitment to the euro and keeping Greece in the union. The longer this period of uncertainty over Greece’s status drags on, the more deposits will flee Greece, and the more likely a euro exit becomes.

Clearly, a Greek exit from the euro zone would be traumatic for Greece and the rest of Europe, and send shock waves through global financial markets. But can a Greek exit from the monetary union really take down the euro itself? That’s a topic for another post …

MORE: Election of French President François Hollande Heralds End to Austerity

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Euro Crisis: Why a Greek Exit Could Be Much Worse than Expected

Posted by Admin on May 22, 2012

http://news.yahoo.com/euro-crisis-why-greek-exit-could-much-worse-082511184.html

Euro Crisis: Why a Greek Exit Could Be Much Worse than Expected

By MICHAEL SIVY | Time.com – 4 hrs ago

 At the Camp David G8 meeting last weekend, lip service was paid to keeping Greece in the euro zone. But economists who watch the continuing financial crisis in Europe are increasingly coming to two conclusions: Greece is likely to abandon the common euro currency now used by 17 European countries. And when it does, perhaps within a matter of months, there will be a damaging domino effect throughout much of Europe. Not all domino effects are created equal, however. And there are two possible consequences if Greece leaves the euro zone that few observers seem to have considered.

The scenario everyone recognizes is based on Greece reviving its traditional drachma currency. What this means is that salaries and prices within Greece would be converted from euros to drachmas, and then the drachma currency would be allowed to depreciate to make the Greek economy more competitive. The problem comes with debts that are denominated in euros, especially if the lenders are outside of Greece. These lenders would naturally resist being repaid with less valuable drachmas. However, if Greek borrowers have to repay the loans with euros, the debt would become more expensive for them to pay off after the drachma is devalued.

(PHOTOS: Protests in Athens)

The most likely domino effect, therefore — and the one most widely expected — is that debts to non-Greek creditors are compromised after Greece switches to the drachma. Either there would be lawsuits over which currency to use, or borrowers would default on the loans, or the lenders would be forced to accept reductions in the amount of the loan that has to be repaid, in order to avoid outright defaults. Whichever outcome occurs, the lenders lose money. Just as in the U.S. mortgage-lending crisis, once some banks lose enough money to become troubled, the contamination spreads to other banks, because they all lend to each other.

That’s not a pleasant prospect, but at least it’s fairly clear how to manage it. Greece leaves the euro zone, and its economy suffers for a couple of years but then stabilizes. With Greece gone, the rest of the euro zone could be propped up more easily. Many major banks take big losses on Greek debt. Some fail, some are taken over by stronger banks. Governments have to bail out the biggest losers. And the banking system is made sound again, although at considerable expense to taxpayers in many countries.

(MORE: Why Portugal May Be the Next Greece)

But what if Greece’s exit from the euro zone causes other kinds of domino effects that don’t have obvious precedents? The fallout could be a lot harder to control. As I see it, there are two possible scenarios that aren’t getting the attention they should.

Derivatives could set off a global chain reaction. Most people have heard of the complex, “synthetic” financial securities known as derivatives, which Warren Buffett famously referred to as “financial weapons of mass destruction.” In the case of bonds, these are known as credit derivatives. They include all sorts of loans secured by bonds, as well as incredibly complicated vehicles that amount to insurance policies if the bonds default. No one really knows how much of this stuff is sloshing around the international financial system, but the total value for all types of bonds was estimated at more than $50 trillion in 2008 and has continued to grow rapidly since then. Trouble is, if the bonds underlying these derivatives become questionable, all the derivatives become uncertain, too, even if they add up to far more than the value of the bonds themselves. Moreover, some of the synthetic investments based on Greek bonds could be governed by Greek law, some by British law (if anything originated in London), and some by U.S. law (if Wall Street was involved).

(MORE: Is a Greek Exit from the Euro Inevitable?)

What if one legal system accepts the conversion of euro loans into drachmas and another one doesn’t? Everything could be thrown into the courts for months. Even worse, if synthetic investments secured by Greek bonds become untrustworthy, why would anyone trust similarly complex investments involving Spanish bonds or Italian bonds?

The result of a meltdown in the world of derivative investments could cause far more chaos than simple bond defaults, not least because it would be almost impossible to figure out who owed how much to whom.

Greece recovers quickly and all the other troubled countries want out of the euro zone too. At the opposite end of the spectrum is the possibility that Greece abandons the euro and bounces back surprisingly fast. Paradoxically, that could cause another sort of disaster. Both Argentina and Iceland suffered currency collapses, and after a horrible year or two, both rebounded and were better off than if they had fought to save a failing currency. Analysts point out that both countries were big exporters of grain, meat or fish, and that sales boomed after currencies were devalued. But Greece, in its own way, could profit from a similar recovery — a rebound in tourism. A 30% drop in the exchange rate might make a vacation in Greece the best deal in years.

(MORE: The Future of Oil: The Environmental and Economic Costs of New Exploration)

So why would that be bad? Think of what it would mean for the other countries in the euro zone. How could the Italian government persuade its people of the need for higher taxes or the Spanish government explain soaring unemployment if Greece were obviously better off outside of the euro zone. Result: The entire European Union might unravel, with financial consequences many times greater than those resulting from Greece alone.

I’m certainly not predicting an extreme, doomsday scenario as the most likely outcome of a Greek exit. But it is important to realize just how unpredictable this situation is. In my own stock portfolio, I eliminated all the banks a long time ago and have largely stuck with financially strong companies that deal in essential goods — such as oil & gas, consumer staples and pharmaceuticals. The euro created a financial entity comparable in scale to the U.S., and if it gets into serious trouble the financial effects could be world-shaking.

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Greek cabinet tackles austerity, rescue hopes rise

Posted by Admin on February 18, 2012

http://news.yahoo.com/more-needed-yet-elusive-greek-bailout-deal-005931736.html;_ylt=AkMlhwQqqjB3a4GMc3efm4Os0NUE;_ylu=X3oDMTNsYnRhaHM4BG1pdANUb3BTdG9yeSBGUARwa2cDN2E0ZWU3YTAtMzdlMC0zMTZkLTk1NjEtMzFhYjBlYWJiZTA5BHBvcwMxBHNlYwN0b3Bfc3RvcnkEdmVyAzMwMTljMDYwLTU5Y2MtMTFlMS05ZmVlLTM3Yzk5MWRiZTI3ZA–;_ylg=X3oDMTFvdnRqYzJoBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3

By David Stamp and George Georgiopoulos | Reuters – 4 mins 57 secs ago

ATHENS (Reuters) – Greece’s cabinet tackled on Saturday how to implement austerity demanded by the EU and IMF as a 130-billion-euro ($171-billion) rescue seemed within reach, while the euro zone considered modifying a deal with private creditors to help Athensreduce its huge debts.

After months of often acrimonious negotiations, Greek hopes were rising that euro zone finance ministers Monday will endorse the rescue which Athens needs to avoid bankruptcy next month when major debt repayments fall due.

A statement from the office of Prime Minister Lucas Papademossaid the cabinet would discuss implementing the bailout package which demands pay, pension and job cuts on top measures that have already hit many Greeks’ living standards.

The cabinet is due to approve measures that already provoked rioting on the streets of Athens last Sunday before they go into a supplementary budget due to be put to parliament next week.

“The Greek people have done everything they can and we are determined to make good on our commitments,” Public Order Minister Christos Papoutsis told reporters as he arrived. Many EU officials remain deeply skeptical of Athens’s will to reform.

Also on the agenda is the future of the old Athens airport, a prime seafront site that lies derelict more than a decade after the new airport opened, symbolizing the wasted opportunities which have helped to reduce Greece to its knees.

Friday German Chancellor Angela Merkel, Italian Prime Minister Mario Monti and Papademos all voiced optimism about a Greek accord during a three-way conference call, Monti’s office said in a statement.

However, Jean-Claude Juncker, who will chair Monday’s meeting of the Eurogroup in Brussels, made clear that urgent work was still needed to get a program to reduce Greece’s crippling debts back on track.

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Euro zone crisis in graphics http://r.reuters.com/hyb65p

Interactive timeline http://link.reuters.com/pys56s

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MISSING THE TARGET

At stake is a target of lowering the debt from the equivalent of 160 percent of annual Greek economic output now to a more manageable 120 percent by 2020.

“All the discussions I will have … until Sunday night will try to move the figure nearer to the target,” Juncker told reporters.

At the moment, EU and IMF officials believe that target – which assumes that Greece will run a budget surplus next year, excluding the massive cost of its debts – will be missed.

Under the main scenario of an analysis by the European Commission, the European Central Bank and the International Monetary Fund, Greek debt will fall to only 129 percent of gross domestic product in 2020, one official said.

The euro zone is therefore looking at modifying a deal negotiated over many months with private creditors under which they would accept a cut of around 70 percent in the real value of their Greek bondholdings.

Senior euro zone finance officials meet Sunday to discuss the analysis and find ways to bring the debt closer to the 120 percent target before the finance ministers gather Monday.

“If you do a number of things you can bring the 129 close to 120,” one euro zone official familiar with the document said.

These might include changes to interest accrued on privately held bonds, but the EU and its national institutions might also play their part, the official said.

Interest rates on EU loans to Greece could be cut, and those national central banks in the euro zone which hold Greek bonds might accept similar terms to the private creditors on some of their holdings.

The national central banks own an estimated 12 billion euros of Greek debt. The European Central Bank has refused to take part in the complex deal for the private creditors – involving swapping old bonds for new ones with a lower face value, lower interest rates and longer maturities – and would need to approve the national central bank decision.

Officials also are considering a cut in the cash “sweetener” which would be offered to the private creditors in return for accepting the cut in the value of their bond holdings

ROCK-BOTTOM MORALE

With Greek morale at rock bottom, the national mood darkened yet further after armed thieves looted a museum Friday in Olympia, birthplace of the Olympic Games. They stole bronze and pottery artifacts weeks after the National Gallery was burgled.

A Greek newspaper suggested the state could no longer look after the nation’s immense cultural heritage properly. “The Greek state has gone bankrupt, let’s face it,” the daily Kathimerini said.

“If the state cannot guard the country’s great cultural heritage for financial or other reasons it must find other ways to do it,” the conservative daily said.

“It could, for example, turn to large foundations and ask them to assume the cost of security at the country’s important museums in the next two to three difficult years.”

Critics say years have been wasted arguing and dithering over major national decisions. This is symbolized by the old Athens airport, which is supposed to be rebuilt as a Monte Carlo-style development of housing, tourist facilities and a marina, but remains a wasteland.

Athens opened a new airport in 2001, well in time for the 2004 Olympic games, but longstanding plans to privatize it have also yet to materialize.

(Additional reporting by Dina Kyriakidou, Angeliki Koutantou and Harry Papachristou and Jan Strupczweski in Brussels; Editing by Michael Roddy)

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Germany, France press for rapid Greek debt deal

Posted by Admin on January 24, 2012

http://news.yahoo.com/euro-zone-finmins-rule-glacial-greek-debt-talks-083938401.html

By Daniel Flynn and Gernot Heller | Reuters – 2 hrs 8 mins ago

PARIS/BERLIN (Reuters) – Germany and France pressed on Monday for a rapid deal between Greece and its private creditors that cuts its soaring debt to sustainable levels and said they were committed to a sealing a new bailout for Athens by March to avert a disastrous default.

Euro zone finance ministers met in Brussels to discuss the terms of a Greek debt restructuring and new treaties that will pave the way for tighter fiscal discipline and a new rescue fund the bloc wants in place by mid-year.

Ahead of that meeting, French Finance Minister Francois Baroinsaid an elusive deal to convince the banks and investment funds that own Greek debt to accept deep losses on their holdings appeared to be “taking shape.”

But his German counterpart Wolfgang Schaeuble warned that any deal must help Greece cut its debt mountain to “not much more than 120 percent of GDP” by the end of the decade, from roughly 160 percent today, something many economists believe will not be achieved by the existing plan.

“The negotiations will be difficult, but we want the second program for Greece to be implemented in March so that the second (bailout) tranche can be released,” Schaeuble told a news conference in Paris with Baroin and the heads of the German and French central banks.

“Greece must fulfill its commitments, it is difficult and there is already a lot of delay,” Schaeuble said.

After several rounds of talks, Greece and its private creditors are converging on a deal in which private bondholders would take a real loss of 65 to 70 percent on their Greek bonds, officials close to the negotiations say.

But some details of the debt restructuring, which will involve swapping existing Greek bonds for new, longer-term bonds are unresolved.

Charles Dallara, the Institute of International Finance chief who is negotiating on behalf of the private debt holders, left Athens over the weekend saying banks had no room to improve their offer.

Sources close to the talks told Reuters on Monday that the impasse centered on questions of whether the deal would return Greece’s debt mountain, currently over 350 billion euros, to levels that European governments believe are sustainable.

“There will likely be an updated debt sustainability analysis that will be discussed at the Eurogroup,” a banking source in Athens said, requesting anonymity. “Talks will continue this week. The aim is to have an agreement by late next Monday.”

In Brussels, European Economic and Monetary Affairs Commissioner Olli Rehn said talks had been “moving well” and expressed confidence a deal could be sealed this week.

German Chancellor Angela Merkel said there was no question of extending Greece a bridging loan if talks with the private sector dragged on further.

The euro pushed up to its highest level against the dollar in nearly three weeks on hopes Greece and the banks could overcome differences and seal a successful debt swap.

LAGARDE DEMANDS

Speaking in Berlin not far from Merkel’s Chancellery, IMF chief Christine Lagarde urged European governments to increase their financial firewall to prevent Greece’s troubles from ensnaring bigger countries like Italy and Spain.

She also called on European leaders to complement the “fiscal compact” they agreed last month with some form of financial risk-sharing, mentioning euro zone bonds or bills, or a debt redemption fund as possible options.

Berlin opposes those steps and Merkel told a news conference with the Belgian prime minister that it was not the time to debate an increase in the euro zone’s bailout funds — the European Financial Stability Facility (EFSF) and its successor, the 500 billion euro European Stability Mechanism (ESM).

“I don’t think it is right to do one new thing then do another, let’s get the ESM working,” Merkel said, reiterating that Germany was prepared to accelerate the flow of capital into the ESM ahead of its planned introduction in mid-2012.

Italian Prime Minister Mario Monti, who has complained openly that his reform efforts have not been recognized by the markets, is reportedly pushing for the rescue fund to be doubled to 1 trillion euros. Lagarde stopped short of advocating that, saying: “I am not saying double it.”

But she did speak out in favor of folding funds from the EFSF into the ESM to give it more firepower.

The more immediate worry is Greece. Without the second bailout from the euro zone and the International Monetary Fund, Athens will not be able to pay back 14.5 billion euros in maturing bonds in March, triggering a messy default that would hurt the entire euro zone and send tremors beyond the 13-year old single currency bloc.

DETERIORATION

Euro zone leaders agreed in October that the second bailout would total 130 billion euros, if private bondholders forgave half of what Greece owes them in nominal terms.

But Greek economic prospects have deteriorated since then, which means either euro zone governments or investors will have to contribute more than thought.

A key sticking point is the coupon, or interest rate, the new Greek bonds would carry. Officials said the new bonds are likely to be 30 years in maturity and carry a progressively higher coupon, which would average out at around 4 percent.

Progress will be presented to the Eurogroup, the euro zone ministers, by Greek Finance Minister Evangelos Venizelos.

“We will listen to the Greek finance minister to hear what models there are,” said Austrian Finance Minister Maria Fekter as the talks got under way. “It is important to have a long-term model so that Greece has time … We know that the banks are not overly happy, but a crash is far more expensive than such a long-term plan.”

After dealing with Greece, euro zone ministers will choose a replacement for European Central Bank Board member Jose Manuel Gonzales Paramo, whose term ends in May.

The 17 ministers of the euro zone will then be joined by 10 ministers from the other European Union countries to finalize a treaty setting up the euro zone’s permanent bailout fund, the

ESM.

The 27 EU finance ministers will also prepare the final draft of another treaty to sharply tighten fiscal discipline in the euro zone, called the “fiscal compact,” that is designed to ensure another sovereign debt crisis cannot happen in future.

EU leaders are to sign off on both treaties at a summit on January 30, allowing the ESM to become operational in July.

(Additional reporting by Stephen Brown and Alexandra Hudson in Berlin, Leigh Thomas in Paris, Lefteris Papadimas and Ingrid Melander in Athens; Writing by Noah Barkin and Jan Strupczewski, editing by Mike Peacock/Jeremy Gaunt)

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Greece stops Gaza-bound boat, immobilizes flotilla

Posted by Admin on July 8, 2011

http://news.yahoo.com/greece-stops-gaza-bound-boat-immobilizes-flotilla-112948472.html

By Renee Maltezou | Reuters – Thu, Jul 7, 2011

ATHENS (Reuters) – The Greek coastguard intercepted a small French boat with Pro-Palestinian activists aboard on Thursday, the third flotilla ship to be prevented from sailing to Gaza to challenge an Israeli blockade.

Greece, just over a year after nine people were killed when Israeli marines stormed a pro-Palestinian flotilla, imposed a ban on all Gaza-bound ships saying it feared for the safety of the activists who are now trying to find a way to set sail.

The boat with about 10 activists aboard, including French politicians, an MEP and a journalist, sailed from Corsica. Activists had said it was in international waters waiting to join the rest of the flotilla, now confined in Greek ports.

The “Dignity” was detected in the early morning near the southern Greek island of Crete as it was refueling at sea and was towed to the port of Sitia for checks, the coastguard said.

“We are still checking their papers. We haven’t spotted any problem so far. They have not disclosed their destination, maybe because they have not decided yet,” said a coastguard official in Crete, on condition of anonymity.

There were no arrests, activists and the coastguard said.

The 10-ship flotilla, with about 350 passengers, was supposed to take drugs, food and building materials to Gaza by the end of June, but a priority was to challenge the blockade.

But the chances that they will reach their destination has faded due to the vigilance of the Greek coastguard which has intercepted three of their ships so far and is closely watching the other seven, moored in ports across Greece.

“WE CAN’T MOVE”

“We are still waiting. We know that the days are going by but we are waiting to see what will happen. So far, we can’t move,” said Dimitris Plionis, one of the activists.

On Friday, the Greek coastguard intercepted the U.S. ship “Audacity of Hope” just a short while after it set sail from Piraeus port, and arrested its captain. Three days later, armed coastguards boarded the Canadian ship “Tahrir” which set sail from Crete and escorted it back. Three people were detained.

Although all four detainees were freed, they face charges for defying the Greek ban, which can only be lifted if the Greek Citizen Protection Ministry issues a new order. Nine ships are being confined in Greek ports and all 10 are accounted for.

Israel says its blockade of Gaza is aimed at stopping weapons from reaching the enclave’s rulers, Hamas — an Islamist group that is branded a terrorist group by some Western nations.

In an effort to calm the activists, Greece offered to ferry the aid to Gaza in cooperation with the United Nations. The activists turned the offer down saying this was “insufficient” as their mission was also about the rights of the Palestinian people and not just about aid.

“It is an offer that is always on the table and is still on the table,” said Greek Foreign Minister Stavros Lambrinides on Thursday in Vienna.

(Additional reporting by Angeliki Koutantou in Athens and Michael Shields in Vienna, editing by Peter Millership)

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