No funds for Greece despite vote
Euro zone governments will not agree to disburse more money to debt-ravaged Greece today, despite the country approving a tough 2013 budget, because there is not yet a consensus on how to make its debts sustainable into the next decade.
Finance ministers gathered in Brussels should, however, give Athens two more years to make the budget deficit cuts demanded of it, a concession that will require funding of around €32 billion, according to a draft document prepared for the meeting.
Loans have been held up since Athens, which has received two bailout packages from the euro zone and IMF, went off-track with promised reforms and budget cuts, partly as a result of holding two elections in the space of three months earlier this year.
The Greek parliament passed an austerity budget for 2013 late yesterday and a structural reform package last Wednesday, meeting the conditions for the release of the next tranche of €31.5 billion of emergency loans from the euro zone.
But officials said the money would not be released since ministers are waiting for the European Commission, the IMF and the European Central Bank, together known as the troika, to present their 'debt sustainability analysis'.
As a result, the ministers may have to talk again later this week, either face-to-face or by teleconference.
"There won't be any definitive decisions today, but I think the general feeling is that we would like the next disbursement to done in the most efficient way possible," said Jean-Claude Juncker, the chairman of euro zone finance ministers.
German Finance Minister Wolfgang Schaeuble said he wanted to hear what troika inspectors had come up with during their visits to Greece before deciding what steps to take next.
"I'd like to see if Greece has fulfilled all its obligations and then I'd like to hear the (EU/IMF) troika report because it depends on the Greek government having found a solution with the troika, and I haven't read anything on that," he said.
A compliance report by the troika calculated that if ministers agree to give Greece two more years to meet its targets, extra funding of around €15 billion would be needed up to 2014 and another 17.6 billion for 2015/16 - amounting to a €32.6 billion funding hole to be filled.
Discussion on how to close that gap will be top of the ministers' agenda today.
"We'll have to see later what proposals are being put forward by the troika in respect of the funding gap," said the Minister for Finance Michael Noonan as he entered the meeting.
Christine Lagarde, the managing director of the IMF, was positive as she arrived in Brussels, saying Greece had done the work it needed to do and its creditors now needed to act.
"Greece has done its work and shown some real resolve, so it's now for the creditors to do the same and certainly the IMF, as always, will play its part," she told reporters.
"We are in for, not a quick fix, but a real fix. Not a quick fix, but a real fix," she said with a broad smile.
The IMF has been pushing for governments to write off some of their official loans to Greece, but Germany, the European Commission and others have said it is not legally possible.