Follow Us

Follow us on Twitter  Follow us on LinkedIn
 

08 February 2012

FT: Greece misses bailout deadline


Greece missed a deadline to approve conditions for a second €130 billion bailout, after a meeting with political leaders was postponed because of last-minute haggling with international lenders over emergency spending cuts.

A government official said Lucas Papademos expected a deal to be presented for approval at a meeting of eurozone finance ministers later in the week. The delay over agreeing €3 billion of extra spending cuts fuelled anxieties that Athens may be forced into a messy default next month. It also triggered concern over whether Greece remains committed to fiscal and structural reform, after two years of failing to implement measures agreed in return for billions of euros in financial support.

Greece has already missed two deadlines this week because of the politicians’ brinkmanship, further exasperating its European paymasters and jeopardising its second bailout along with a voluntary restructuring of €200 billion of government debt.

In Brussels, José Manuel Barroso, president of the European Commission, insisted that eurozone leaders would continue to strive to keep Greece in the euro, an apparent rebuke to Neelie Kroes, the Dutch member of his commission, who was quoted in her country’s press as saying a Greek exit would not cause significant shockwaves. “All Europe has its eyes now on Athens”, Mr Barroso said. “The costs of a default of Greece, the costs of a possible exit of Greece from the euro, would be much higher than the costs of continuing to support Greece.”

Greek finance ministry officials have scrambled to come up with last-minute spending cuts acceptable to the “troika” – representatives of the European Union, European Central Bank and International Monetary Fund – after several proposals were rejected as unrealistic. Spending cuts of €1.1 billion on healthcare, €400 million on defence and €400 million on local government have already been agreed, to put this year’s budget targets back on track amid a deeper than projected recession.

Full article (FT subscription required)



© Financial Times


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment