Eurogroup drops face-to-face bailout talks as Greeks argue
Ministers in the Eurogroup had been expected to gather in Brussels tomorrow for a meeting which, if all had gone to plan, would have approved the 130 billion euro rescue and save Greece from a messy bankruptcy next month.
However, with the European Union's patience with Greece close to breaking point, Eurogroup Chairman Jean-Claude Juncker said the ministers would hold only a telephone conference call before a regular meeting already scheduled for Feb. 20.
Juncker said he was still awaiting written undertakings from Greek party leaders on pushing through with the austerity package of pay, pension and job cuts - which parliament passed yesterday as rioters torched dozens of buildings in central Athens.
"I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the programme," he said in a statement.
Juncker also said the funding hole required more talks with the "troika" of Greece's EU and IMF lenders.
"It has appeared that further technical work between Greece and the troika is needed in a number of areas, including the closure of the fiscal gap of 325 million euros in 2012 and the debt sustainability analysis," he added.
Critics say the drastic belt-tightening is only deepening Greece's recession, now in its fifth year. With an election expected in April, the EU wants any politician who might take power afterwards to promise to stick with the programme.
The frontrunner to become prime minister, conservative New Democracy leader Antonis Samaras, indicated during Sunday's parliamentary debate that he would try to renegotiate the terms of the bailout, further sowing doubt in the minds of European leaders who say they are tired of broken promises.
The cabinet of Prime Minister Lucas Papademos met in Athens to fill the 325 million euro hole in its overall package of 3.3 billion euros in extra budget cuts this year which it must spell out in detail to get the new rescue from the EU and IMF.
Greek politicians have sailed past a series of deadlines in committing themselves to the budget cuts which provoked the most serious violence in Athens in years. Every time they appear finally to have settled everything, new problems or disputes surface, angering the EU.
The EU and International Monetary Fund want Greece to account for every cent of budget cuts before they approve the rescue, which includes a bond swap cutting the real value of private-sector investors' bond holdings by some 70 percent.
Athens needs the funds to avoid a disorderly default when 14.5 billion euros in debt repayments fall due on March 20.
But the punishing austerity measures are fuelling social turmoil in Greece, where unemployment hit a high of 20.9 percent in November and half of young Greeks are jobless.
The country posted yet more dire economic figures today, with flash estimates showing GDP shrank 7 percent in the fourth quarter of 2011 after a 5 percent contraction in Q3.
COMMENTS >
