Decision on new bailout for Greece deferred
BY HENRY CHU, LOS ANGELES TIMES
LONDON - Amid rising rancor and distrust, European finance officials held off Wednesday on approving a second bailout for Greece, saying that the nation's leaders had yet to fulfill all the requirements to receive the money.
The decision came despite a last-minute scramble from Athens and capped a day of escalating tensions between Greece and its eurozone partners, including unusually blunt remarks from top Greek officials, who accused other Europeans of trying to boot their country out of the eurozone.
"There are many in the eurozone who don't want us anymore," the Greek finance minister, Evangelos Venizelos, said at a meeting with the nation's president, Karolos Papoulias.
After a conference call Wednesday evening, finance ministers from the 17 countries that use the euro said some progress had been made in their negotiations with Athens on a new $170 billion bailout, but that a few issues still needed ironing out. They added that an agreement on the rescue package could come next Monday.
Still, the delay piled additional pressure onto Greece as it seeks to avert a humiliating default next month that could roil global markets.
It also reflected the increasingly hard line adopted by fellow eurozone countries. In recent days, officials from Germany, the Netherlands and other rich European states have accused Athens of shirking its obligations.
That has prompted Greek officials to lash back, including an angry outburst from Papoulias, Greece's ceremonial president, that cited Germany's finance minister, Wolfgang Schaeuble, by name.
"Who is Mr. Schaeuble to disparage Greece? Who are the Dutch? Who are the Finns? We always had the pride to defend not just our freedom, not just our country, but the freedom of Europe," Papoulias declared.
The rising tension comes as new figures released Wednesday showed the eurozone's economic output contracting in the last quarter of 2011, a highly volatile period during which the big economies of Italy and Spain also looked vulnerable. Even powerhouse Germany saw its economy slow down in the final three months of 2011.
A second bailout for Greece, the epicenter of the debt crisis, was to be top of the agenda at a gathering of eurozone finance ministers scheduled for Wednesday. Officials called the meeting because they said they were encouraged by the Greek government's approval of harsh new austerity policies and the parliament's ratification of those measures over the weekend, despite protests and riots on the streets of Athens.
But the head of the finance ministers' group abruptly cancelled the meeting late Tuesday and arranged a conference call instead, issuing a terse statement that Greece had yet to fulfill all the conditions for a new rescue package.
Athens scrambled Wednesday to meet those demands. They included written pledges promising to maintain the austerity policies after elections in April and details of an additional $430 million in spending cuts.
(EDITORS: STORY CAN END HERE)
"Substantial further progress has been made," including "strong assurances provided by the leaders of the two coalition parties in Greece's government," said Jean-Claude Juncker, the prime minister of Luxembourg and president of the finance ministers' group.
But more work was necessary on how to monitor Greece's implementation of its austerity measures, he said, in an allusion to the failure of Athens to follow through on past promises, such as mass layoffs of public-sector workers and privatization of state assets.
Greece is already on its knees after repeated rounds of austerity measures, and many of its citizens find Europe's new demands both devastating and demeaning. The Greek economy shrank by nearly 7 per cent last year, on top of contractions in at least each of the previous two years.
Still, Greek officials insist that their country's future lies in remaining a member of the currency union.
"We do not have a choice between a pleasant or unpleasant option but a choice . . . between either unpleasant or even more unpleasant solutions," Venizelos said.
© Copyright (c) McClatchy-Tribune Information Services
An employee of the state-owned Labour Housing Organisation (OEK) allegedly threatens to jump off the company building in Athens on February 15, 2012, after the government decided to shut down the organisation and lay off its staff. Greece is under pressure from the EU and the IMF to reduce state spending in order to qualify for loans and avert a debt default in March. Photograph by: ANGELOS TZORTZINIS, AFP/Getty Images |
LONDON - Amid rising rancor and distrust, European finance officials held off Wednesday on approving a second bailout for Greece, saying that the nation's leaders had yet to fulfill all the requirements to receive the money.
The decision came despite a last-minute scramble from Athens and capped a day of escalating tensions between Greece and its eurozone partners, including unusually blunt remarks from top Greek officials, who accused other Europeans of trying to boot their country out of the eurozone.
"There are many in the eurozone who don't want us anymore," the Greek finance minister, Evangelos Venizelos, said at a meeting with the nation's president, Karolos Papoulias.
After a conference call Wednesday evening, finance ministers from the 17 countries that use the euro said some progress had been made in their negotiations with Athens on a new $170 billion bailout, but that a few issues still needed ironing out. They added that an agreement on the rescue package could come next Monday.
Still, the delay piled additional pressure onto Greece as it seeks to avert a humiliating default next month that could roil global markets.
It also reflected the increasingly hard line adopted by fellow eurozone countries. In recent days, officials from Germany, the Netherlands and other rich European states have accused Athens of shirking its obligations.
That has prompted Greek officials to lash back, including an angry outburst from Papoulias, Greece's ceremonial president, that cited Germany's finance minister, Wolfgang Schaeuble, by name.
"Who is Mr. Schaeuble to disparage Greece? Who are the Dutch? Who are the Finns? We always had the pride to defend not just our freedom, not just our country, but the freedom of Europe," Papoulias declared.
The rising tension comes as new figures released Wednesday showed the eurozone's economic output contracting in the last quarter of 2011, a highly volatile period during which the big economies of Italy and Spain also looked vulnerable. Even powerhouse Germany saw its economy slow down in the final three months of 2011.
A second bailout for Greece, the epicenter of the debt crisis, was to be top of the agenda at a gathering of eurozone finance ministers scheduled for Wednesday. Officials called the meeting because they said they were encouraged by the Greek government's approval of harsh new austerity policies and the parliament's ratification of those measures over the weekend, despite protests and riots on the streets of Athens.
But the head of the finance ministers' group abruptly cancelled the meeting late Tuesday and arranged a conference call instead, issuing a terse statement that Greece had yet to fulfill all the conditions for a new rescue package.
Athens scrambled Wednesday to meet those demands. They included written pledges promising to maintain the austerity policies after elections in April and details of an additional $430 million in spending cuts.
(EDITORS: STORY CAN END HERE)
"Substantial further progress has been made," including "strong assurances provided by the leaders of the two coalition parties in Greece's government," said Jean-Claude Juncker, the prime minister of Luxembourg and president of the finance ministers' group.
But more work was necessary on how to monitor Greece's implementation of its austerity measures, he said, in an allusion to the failure of Athens to follow through on past promises, such as mass layoffs of public-sector workers and privatization of state assets.
Greece is already on its knees after repeated rounds of austerity measures, and many of its citizens find Europe's new demands both devastating and demeaning. The Greek economy shrank by nearly 7 per cent last year, on top of contractions in at least each of the previous two years.
Still, Greek officials insist that their country's future lies in remaining a member of the currency union.
"We do not have a choice between a pleasant or unpleasant option but a choice . . . between either unpleasant or even more unpleasant solutions," Venizelos said.
© Copyright (c) McClatchy-Tribune Information Services
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