Saturday, July 2, 2011

Euro-Area Ministers Back Greek Aid Payment, Shift Focus to Second Bailout

Eurozone delays decision on new Greek bailout

• Eurozone finance ministers scrap planned meeting in Brussels on Sunday
    One euro coin/eurozone crisis
    Eurozone ministers have to agree a €12bn (£10bn) loan for Greece or the debt-laden country would default in July. Photograph Jens Buettner/EPA
    Eurozone finance ministers have cancelled a crisis meeting planned for Sunday because they need more time – as much as two more months – to nail down the details of a second bailout for Greece, officials said Friday. They will, however, hold a video conference on Saturday to sign off on a new loan instalment that will keep Greece from bankruptcy over the summer. Whereas the payout of the next loan instalment from Greece's first bailout was a near certainty after Athens voted through new austerity measures this week, talks were still ongoing over a second rescue package that would support Greece over the longer-term. "It would have been too ambitious to get the deal [on a second package of rescue loans] done by Sunday," said a eurozone official. Several key aspects of a new bailout, such as the contribution of banks and other investment funds, are still up in the air – although eurozone leaders said last week that there will be new financing for the struggling country. The ministers will continue their discussions on the new programme at their next scheduled meeting on 11 July, but getting everything done by then may also prove difficult, the official said. He was speaking on condition of anonymity because of the sensitivity of the talks on Greece. A second eurozone official said that while the cornerstones of the new programme have to be drawn up soon, it may not be finalized until the next Greek loan instalment is due in September. The official was also speaking on condition of anonymity. A spokesman for Jean-Claude Juncker, the prime minister of Luxembourg and chairman of the eurogroup, said earlier that a video conference had been scheduled for Saturday evening, but didn't provide a reason for the change in the plan. He said he didn't know whether a statement would be released after the call. The ministers have to sign of on a €12bn (£10bn) loan instalment of Greece's existing bailout, without which the debt-ridden country would default in July. Greece this week fulfilled the preconditions for getting the money by passing unpopular austerity and privatization programmes through more...

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