Financial News

  • 13 November 2012, 9:35

Greek Crisis: New Cash Lifeline In Sight

Greece appears to have met the austerity demands of its international lenders and eurozone partners but still faces an anxious wait for more bailout funds to avoid bankruptcy.

The country, which faces a bond repayment on Friday it cannot afford, is awaiting final approval of a 23.5bn loan to meet the bill.

Just hours after the Greek Parliament voted through its 2013 Budget which was laden with additional spending cuts, the head of the eurogroup of finance ministers Jean-Claude Juncker confirmed that Greece's international lenders had prepared a "positive" report on the country's reform efforts.

A favourable report by the so-called Troika, made up of the EU, European Central Bank (ECB) and International Monetary Fund (IMF), was another step demanded of Athens in return for the bailout loan.

Mr Juncker said one issue remained unresolved - how much time Greece will be given to reduce its debts to a manageable level.

He confirmed that eurozone finance ministers meeting on Monday evening in Brussels would discuss whether Greece should be given extra time to cut its debt to 120% of its GDP beyond the original deadline of 2020.

It is reported that the Troika inspectors recommend giving Athens the further two years it has requested but Mr Juncker did not give any detail.

However, there will be no decision at the meeting on whether to disburse the next tranche of aid - despite the favourable report from the Troika.

"The basis is positive, because the Greeks have really delivered," Mr Juncker said.

The conditions for Greece to secure bailouts have come at a high price for the country's people with a deep recession about to head into its sixth year.

More than a quarter of Greeks are unemployed as private investment remains elusive amid deep spending cuts in the public sector.

The latest budget came days after a separate bill of deep spending cuts and tax hikes as part of efforts in Athens to meet the demands of its lenders.

Prime Minister Antonis Samaras has pledged that such measures would be the last Greeks had to endure provided the country implemented what it had agreed.

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