Eurozone, IMF Give Greece A 10-Day Deadline To Honor Promises

Author: Market News International | Category: News

LUXEMBOURG (MNI) – Greece’s bailout partners said Monday night that
Athens had just ten days to make good on some 89 past promises if it
hoped to receive a bankruptcy-saving infusion of aid.

The October 18 deadline, the date of the next EU leaders’ summit,
comes as Greek and Eurozone officials speed up their efforts to decide
on disbursement of a E31.5 billion loan tranche amid warnings that
Athens will run out of cash by the end of November.

Jean-Claude Juncker, the head of the Eurozone finance ministers’
group, the Eurogroup, praised the Greek government’s recent efforts and
“substantial progress” but warned that Greece needs to close a gap in
its 2013-2014 budget as soon as possible.

There is “no time to lose” when it comes to finding a solution for
Greece, Juncker said following talks that Greek finance ministry
officials described as “tough.”

Criticism of Greece’s programme compliance among the Eurozone’s 17
finance ministers was not limited to the outspoken AAA-rated governments
of Germany, the Netherlands and Finland, Juncker said.

IMF Managing Director Christine Lagarde said that it would not be
enough for Athens to simply agree to act on the 89 prior commitments,
stressing that “implementation” is what counts.

Lagarde also acknowledged that Greece had been making progress but
said that more needed to be done “on all fronts.”

Asked if the IMF believed Greece’s official sector creditors ought
to write down some of their Greek government bond holdings, Lagarde said
that “all options” to help restore Greece’s economic health and access
to capital markets need to be considered.

However, EU Economic and Monetary Affairs Commissioner Olli Rehn
said it would be “premature” to start talking about the possibility of
breaking up Greece’s next aid tranche into several installments, as
Eurozone countries did in a previous round.

At the same meeting, Eurozone finance ministers said that Portugal
was “broadly on track” to meet the conditions tied to its bailout
package and that they expected a total of E4.3 billion in aid to be
approved shortly. They formally approved a E800 million tranche of aid
today but the rest still needs to be rubber stamped by EU finance
ministers tomorrow and by the IMF board.

Turning to the situation in Spain, the finance ministers agreed
that the government in Madrid was on track with its reform of the
banking sector and that aid for Spanish banks, from the bloc’s newly
inaugurated bailout fund, the European Stability Mechanism, would likely
start in November.

A wider bailout programme for Spain that could pave the way for
secondary market intervention by the European Central Bank to lower
borrowing costs, and the issue of whether the ESM should take on
already-existing bank debts, was not discussed, Juncker said.

Cyprus’ request for aid to help cope with its stricken banking
sector was still being discussed, Juncker and Lagarde said.

–Brussels Newsroom, +324-952-28374; pkoh@mni-news.com

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