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02 July 2013

Reuters: Greece has three days to deliver or face consequences


Greece has three days to reassure Europe and the IMF that it can deliver on conditions attached to its bailout in order to receive its next tranche of aid.

The lenders are unhappy with progress Greece has made towards reforming its public sector. Athens, which has about €2.2 billion of bonds to redeem in August, needs the talks to conclude successfully. If they fail, the International Monetary Fund might have to withdraw from the €240 billion bailout to avoid violating its own rules, which require a borrower to be financed a year ahead. That would heighten the risk that concerted efforts by policymakers over the past nine months to keep a lid on the eurozone crisis could unravel, at a time when tensions are rising in other troubled debtor countries. Athens is scrambling to bridge differences with troika inspectors and wrap up the review by the end of this week.

Tensions over bailout terms have also mounted in Portugal, where Finance Minister Vitor Gaspar, the architect of its bailout measures, resigned on Monday and was followed on Tuesday by Foreign Minister Paulo Portas. In Italy, Prime Minister Enrico Letta called a government meeting after a coalition partner threatened to withdraw, demanding faster moves to make the economy more competitive.

Representatives of the EU-IMF-ECB "troika" have been holding serial meetings with government ministers in Athens on a host of outstanding issues. If talks are not concluded by the middle of the month, Athens risks missing the instalment. Athens and the troika are at odds over an unpopular property tax and a sales tax for restaurants, while a shortfall of more than €1 billion has emerged at state-run health insurer EOPYY, meaning automatic spending cuts may have to be agreed to bring it back on an even keel. The government plans to ask its creditors to lower this year's privatisation target of €2.6 billion after failing to find a buyer for natural gas company DEPA.

Full article



© Reuters


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