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Greece: Eurozone ministers delay decision on vital loan | Greece: Eurozone ministers delay decision on vital loan |
(about 1 hour later) | |
Eurozone finance ministers have postponed their decision on a 12bn-euro ($17bn; £10bn) loan to Greece until it introduces further austerity measures. | |
The ministers said they expected to pay the latest tranche of a much larger aid package by mid-July. | |
But its release depends on the Greek government surviving a vote of confidence on Tuesday. | But its release depends on the Greek government surviving a vote of confidence on Tuesday. |
Parliament then must also pass 28bn euros worth of new spending cuts and economic reforms. | Parliament then must also pass 28bn euros worth of new spending cuts and economic reforms. |
This latest tranche - of a 110bn-euro European Union and International Monetary Fund aid package - is crucial as Greece needs the aid by July to pay off the creditors of its huge debts. | |
But there are also practical questions about whether the country can implement the reforms being demanded in return. | |
Greeks have already seen wages and pensions cut and there have been regular, mass demonstrations - even riots - in protest. | Greeks have already seen wages and pensions cut and there have been regular, mass demonstrations - even riots - in protest. |
The latest public opposition to the cutbacks involves Greek workers at the state-owned electricity company, who are on the first day of a 48-hour strike. | |
Privatisation fears | |
After a seven-hour meeting in Luxembourg that ended early on Monday, the finance ministers said they would not approve the disbursement to Greece of the 12bn euros (8.7bn euros from eurozone governments and 3.3bn euros from the IMF) until the country's parliament passed the fiscal strategy and privatisation laws. | After a seven-hour meeting in Luxembourg that ended early on Monday, the finance ministers said they would not approve the disbursement to Greece of the 12bn euros (8.7bn euros from eurozone governments and 3.3bn euros from the IMF) until the country's parliament passed the fiscal strategy and privatisation laws. |
Asked how Greece could privatise a large state-controlled company every 10 days, as the current plans envision, Luxembourg Prime Minister Jean-Claude Juncker replied: "They will have to do so." | |
"This is something that affects me greatly," said Mr Juncker, who also chairs the meetings of the 17 eurozone finance ministers. "You look at the reaction of the people on the streets. You see they are rebelling." | |
The EU's economic and monetary affairs commissioner Olli Rehn said he was "certain that Greece will be able to take the decisions needed because the alternative is so much worse." | |
Mr Juncker said that as long as the Greek parliament supported the new measures, he was certain Greece would get a second bail-out. | |
New aid | |
A new bail-out package about the same size as the first was agreed in principle by EU finance ministers on Sunday. | |
The new aid package, to be outlined by early July, will include loans from other eurozone countries. | The new aid package, to be outlined by early July, will include loans from other eurozone countries. |
It is also expected to feature a voluntary contribution from private investors, who will be invited to buy up new Greek bonds as old ones mature. | It is also expected to feature a voluntary contribution from private investors, who will be invited to buy up new Greek bonds as old ones mature. |
Mr Juncker said that money had to be freely given - or it would be seen as a technical default on debt repayments: "It is absolutely clear that no pressure will be put on the financial institutions, so as to avoid a Greek selective default. Voluntary means voluntary." | Mr Juncker said that money had to be freely given - or it would be seen as a technical default on debt repayments: "It is absolutely clear that no pressure will be put on the financial institutions, so as to avoid a Greek selective default. Voluntary means voluntary." |
If Greek were to default - or seen to be in default - it would mean massive losses for European banks that hold Greek debt, including the European Central Bank. | |
Officials said the new plan was expected to fund Greece into late 2014 and total about 120bn euros. | Officials said the new plan was expected to fund Greece into late 2014 and total about 120bn euros. |