News Column

Eurozone Ministers Meet to Plug Greek Bailout Holes

Nov. 20, 2012
Eurozone headquarters

Eurozone finance ministers late Tuesday downplayed expectations that they would be able to strike a definite deal on Greece's bailout, as they gathered in Brussels for a meeting expected to release a new aid tranche.

A major issue to be settled is how to bridge a 32.6-billion-euro (41.7-billion-dollar) gap in Greece's bailout, which was created after the ministers last week agreed to give the country two extra years to nurse its finances back to health.

Austrian Finance Minister Maria Fekter said she wanted to see "no fresh money because it is difficult to explain to our taxpayers." Other options on the table include an interest rate cut for Athens or extending its loans' maturities.

French Finance Minister Pierre Moscovici called for all eurozone countries to "step over their red lines" to find a "robust" and "permanent" solution.

A disagreement has also emerged among Greece's international creditors over debt, with the Europeans and the International Monetary Fund (IMF) split on whether Athens should have until 2020 or 2022 to cut it down to 120 per cent of gross domestic product (GDP).

"Everybody wants to see the Greek situation resolved. What's at issue is the means of doing so," Irish Finance Minister Michael Noonan told reporters before meeting his 16 Eurogroup counterparts.

"There are substantial issues that have to be resolved. I would hope that if we sit late into the night they might be resolved, but there's no certainty," he added.

German Finance Minister Wolfgang Schaeuble also said he "can't promise" a solution being found Tuesday. Eurogroup president Jean-Claude Juncker said he was "not completely confident."

But others insisted that it was high time for the ministers - who are meeting for the second time in two weeks - to reach an agreement.

"It's very important for the future of the union that there be a credible solution for Greece," said Spanish Economy Minister Luis de Guindos, whose country has also been plagued by the debt crisis that engulfed Greece.

"It's essential that we will be able to decide on a set of credible measures on reducing the debt burden of Greece tonight," EU Economy Commissioner Olli Rehn added. "It's essential that we will be able to clear the air from all uncertainty which is still hanging over Greece and thus over the eurozone."

One thing the ministers were expected to finalize on Tuesday was the release of a 31.5-billion-euro bailout tranche for Athens.

The funds should have been disbursed in June, but were delayed as the Greek government raced to meet austerity and reform conditions demanded by its troika of creditors - the European Commission, the European Central Bank and the IMF.

Two weeks ago, the coalition government of conservative Prime Minister Antonis Samaras narrowly passed a new package of salary decreases, pension cuts and tax hikes totaling 13.5 billion euros.

The new austerity measures sparked several protests, bringing tens of thousands of recession-weary demonstrators into the streets, as the unemployment rate surged to more than 25 per cent.

Greek officials now hope that their efforts will be rewarded with a rapid disbursement of bailout money.

"We are optimistic that things will work out in our favour this evening," an official at the Greek Finance Ministry told dpa, speaking on the condition of anonymity.

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Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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