sponsored by


Euro officials seek way to unlock Greek crisis

Send a link to a friend

[November 26, 2012]  BRUSSELS (AP) -- Finance ministers from the 17 European Union countries that use the euro are trying to hammer out a deal Monday in Brussels on the desperately needed next installment of bailout money for struggling Greece.

The ministers have failed twice in the last two weeks to reach an agreement them to release some euro44 billion ($56.8 billion) for the cash-strapped country.

But Greece is already living on borrowed time -- it still owes money it was supposed to repay last week.

On his way into the meeting, Olli Rehn, the EU's top financial official, said it was important for the ministers and Greece's international creditors including the International Monetary Fund to agree on a deal. Distributing the next batch of bailout money was essential, he said, "in order to end the uncertainty that's still hanging over Greece. It's important for Greece, important for Europe."

"I want to encourage all the euro area member states and the IMF to go the last mile to find an agreement -- in fact to go the last centimeter, because we are so close," Rehn said. "Greece has delivered. Now it is the delivery time for the eurogroup and the IMF."

In return for its bailout loans, Greece has had to impose several rounds of austerity measures and submit its economy to scrutiny from the so-called troika of the IMF, European Central Bank and European Commission.

Greece's fortunes are inextricably tied to the rest of the eurozone. Without the bailout funds that have been keeping it afloat since May 2010, the country would default and could end up having to leave the eurozone. This could have a domino effect on other financially troubled eurozone nations.

Greece is unlikely to complete its program of budget cuts and reforms by 2014. For this reason, it is likely to be given an additional two years by the so-called troika of international lenders, composed of the IMF, the European Central Bank, and the European Commission, which is the executive arm of the 27-country European Union.

But that extension will cost several billion more, and it is disagreements over how to fund this that have stopped Greece from getting its money.

[to top of second column]

"There have been disputes in recent weeks among the members of the troika," said Craig Erlam, an analyst at Alpari. "However these are expected to be resolved today, meaning Greece will finally receive the next bailout payment. If not, Greece could run out of money in the coming days, the consequences of which could be disastrous for the eurozone."

Several proposals have been floated as ways to plug the financial hole. These include reducing the interest rate Greece pays on its loans from euro partners, lenders such as the ECB giving up interest or profit on their loans, a debt buyback that would reduce the country's burden in the long term, and debt forgiveness by some other countries in the eurozone.

But most of those solutions involved dipping once again into the pockets of taxpayers -- something that has become increasingly unpalatable politically.

The troika partners also disagree on whether Greece should be given an extra two years, to 2022, to bring its debt down to 120 percent of gross domestic product from the 176 percent forecast for this year. The IMF has resisted such an extension.

The ministers hope to reach a political agreement Monday. That agreement will have to be submitted to national parliaments in some countries. After that, the finance ministers plan to hold another meeting, either in person or by telephone, to give final approval to the disbursement.

[Associated Press; By DON MELVIN]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

< Top Stories index

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor