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Greece's future uncertain as EU fails on deal to give more aid
Source: Agencies |
November 22, 2012, Thursday
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EUROPEAN Union officials failed yesterday to reach a deal on giving Greece more aid, prolonging uncertainty over the future of the debt-hobbled country and the 17-member eurozone.
Jean-Claude Juncker, chairman of the meeting of finance ministers from the 17 countries that use the euro, said the talks, which lasted nearly 12 hours, will reconvene on Monday. It was the second consecutive meeting at which the ministers failed to agree on a deal, highlighting the depth of their divisions over how to handle Greece's huge debt problem without reaching more deeply into the pockets of their own taxpayers.
But Juncker said he was certain a deal could be reached.
"We are very close to a result. We see no major stumbling block," he said. There are technical issues and calculations to be made in coming days, he said.
But Christine Lagarde, the managing director of the International Monetary Fund, which gives Greece bailout loans alongside the eurozone, sounded a more cautious note, saying only "we have narrowed the positions."
There has been disagreement among the ministers and the IMF on how to make Athens' debt manageable. The ministers are in favor of giving Greece an extra two years, to 2022, to bring its debt down to 120 percent of gross domestic product from the 176 percent forecast for this year. The IMF has resisted such an extension.
A deal on this issue is needed for the group of creditors to pay Greece the next batch of its rescue loans of 44.6 billion euros (US$57 billion). Greece needs the money to avoid bankruptcy.
Greece has been relying since 2010 on international bailout loans, under terms supervised by the so-called troika - the IMF, the European Central Bank and the European Commission. Two weeks ago, Greece's coalition government narrowly succeeded in passing a 13.5-billion-euro package of budget cuts, tax increases and reforms in order to secure the latest loan payment.
The main aim of the bailout program is to right the country's economy and get it to a point where it no longer relies on international aid and can independently raise money on the debt markets.
Jean-Claude Juncker, chairman of the meeting of finance ministers from the 17 countries that use the euro, said the talks, which lasted nearly 12 hours, will reconvene on Monday. It was the second consecutive meeting at which the ministers failed to agree on a deal, highlighting the depth of their divisions over how to handle Greece's huge debt problem without reaching more deeply into the pockets of their own taxpayers.
But Juncker said he was certain a deal could be reached.
"We are very close to a result. We see no major stumbling block," he said. There are technical issues and calculations to be made in coming days, he said.
But Christine Lagarde, the managing director of the International Monetary Fund, which gives Greece bailout loans alongside the eurozone, sounded a more cautious note, saying only "we have narrowed the positions."
There has been disagreement among the ministers and the IMF on how to make Athens' debt manageable. The ministers are in favor of giving Greece an extra two years, to 2022, to bring its debt down to 120 percent of gross domestic product from the 176 percent forecast for this year. The IMF has resisted such an extension.
A deal on this issue is needed for the group of creditors to pay Greece the next batch of its rescue loans of 44.6 billion euros (US$57 billion). Greece needs the money to avoid bankruptcy.
Greece has been relying since 2010 on international bailout loans, under terms supervised by the so-called troika - the IMF, the European Central Bank and the European Commission. Two weeks ago, Greece's coalition government narrowly succeeded in passing a 13.5-billion-euro package of budget cuts, tax increases and reforms in order to secure the latest loan payment.
The main aim of the bailout program is to right the country's economy and get it to a point where it no longer relies on international aid and can independently raise money on the debt markets.
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