Eurozone Leaders Postpone Greece Bailout Decision

BRUSSELS, November 13 (RIA Novosti) – Eurozone finance ministers have delayed a decision on whether to release the latest 31.5-bln euro tranche of bailout funds to Greece despite the Greek government’s efforts to meet the demands of the international lenders.

“I expect that we’ll be able to take a definite decision about the disbursement of the next tranche at the November 20 meeting,” Jean-Claude Juncker, the head of the Eurogroup, told reporters in Brussels on Monday.

Junker praised Greece for adopting an impressive reform program and a budget for 2013, but said “a few more things have to be checked, because not everything that was promised to be done has been done.”

The Greek parliament adopted early on Monday a highly unpopular 2013 budget making the final crucial step for securing a new 31.5-billion-euro bailout tranche from the European Union, the International Monetary Fund and the European Central Bank.

The budget envisages 9.4 billion euros (almost $12 billion) in cuts, affecting mainly pensions and wages of state employees. It forecasts that the country’s GDP will decline by 4.5 percent, worse than previously expected, and the debt will increase to 346 billion euros (over $434 billion).

In addition, the Greek lawmakers have recently passed a budget austerity bill that envisions 13.5 billion euros in spending cuts as well as tax hikes and labor reforms by 2016.

The austerity package presents the biggest challenge to the fragile three-party coalition government, as Greece says it would run out of money on November 16 to pay its huge debts.

Greece, which is teetering on the brink of sovereign default, has relied on bailout loans since May 2010 when it was granted a 110 billion euro rescue package until 2013.

Creditors hoped that this would enable Greece to make a gradual return to market financing by 2012, but the rapid collapse of the country’s credit rating and its economic turmoil and loss of lender confidence prevented this. The troika was then forced to step in with a second (130 billion euro) loan package in spring 2012.


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