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Eurozone Greece talks called off

A meeting of the finance chiefs of the 17 eurozone countries to discuss Greece's second multibillion bailout planned for Wednesday has been called off after Athens failed to deliver on several demands made by its partners in the currency union.

The last-minute cancellation of the meeting - which was expected to give the green light for a key debt relief deal with private creditors linked to the bailout - shows the eurozone wants much tougher guarantees now from Athens before giving it an extra 130 billion euro (£108 billion) in rescue loans, on top of 110 billion euro (£92 billion) granted in 2010.

Tensions between Athens and other European capitals have hit new highs this week. While the European Union is officially still warning of the far-reaching dangers of a disorderly default by Greece, some politicians have in recent weeks downplayed the effects of such an event.

"It has appeared that further technical work between Greece and the troika is needed in a number of areas," said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers.

While the Parliament in Athens faced down violent protests over the weekend to approve a far-reaching new austerity package, the cabinet of ministers remained locked in talks over how to save an extra 325 million euro demanded last week by the eurozone.

The other finance ministers also want assurances from the leaders of Greece's two main political parties that they will implement the promised spending cuts and reforms after national elections expected for April. That demand is especially tenuous, with some commentators questioning whether it undermines democracy in Greece.

Mr Juncker said neither of these demands had been met in time for the meeting to go ahead.

Instead, the finance ministers will speak in a teleconference on Wednesday and plan to meet in person on Monday in Brussels.

Greece is still optimistic that it will eventually get the bailout. "The adoption with overwhelming majority (in Parliament) of the programme I think makes the positive decision of the upcoming eurogroup mandatory," Manolis Othonas, Greece's deputy minister for civil protection, said in Parliament.

But after keeping Greece alive through bailout loans for almost two years - and seeing the country repeatedly miss its targets - some of the richer euro countries such as the Netherlands and Germany are reluctant to commit new money without firm assurances.


From Belfast Telegraph