Greek Aid Payment Call Won’t Be Made Next Week, EU Official Says

By Craig Stirling - Nov 8, 2012 4:41 PM GMT+0100

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Euro-area finance ministers may not make a decision on unlocking funds for Greece until late November as they await a full report on the country’s compliance with the terms of its bailout, a European Union official said.
Finance chiefs won’t make the call to release 31.5 billion euros ($40.1 billion) of aid for Greece that has been frozen since June when they meet in Brussels on Nov. 12, the official said today on condition of anonymity because the deliberations are private.

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Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy. Photographer: Kostas Tsironis/Bloomberg

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Ministers will await a final report from the so-called troika that oversees euro-area bailouts on Greece’s efforts to meet the conditions of its second bailout since 2010 before taking action, the official said. That report isn’t finished yet, the official said, and while a preliminary version may be available for the Nov. 12 meeting, that won’t be enough for ministers to base their decision on.
Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy. While German Chancellor Angela Merkel last month traveled to Athens to signal her willingness to keep the Greece in the euro, the country is still struggling to reach its debt-reduction targets amid a combination of Greek political resistance to more cuts and economic collapse that has brought record unemployment.
“We’re not out of the woods yet,” German Finance Minister Wolfgang Schaeuble said in Hamburg today. “At the moment, I don’t see how we can take the decision already next week.”

General Strike

The EU official said Nov. 26 is a possible date for euro- area finance ministers to sign off on the next disbursement of rescue aid to Greece.
A Greek government spokesman declined to comment when asked if a decision on the aid payment would be made at the Nov. 12 meeting.
Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of a bill on pension, wage and benefit cuts needed for bailout funds to flow. The vote occurred on the second day of a 48-hour general strike which shut down hospitals, schools and government services and brought public transport to a standstill. Apparent changes in privatization laws will need to be evaluated, the official said.
The parliament will convene again on Nov. 11 to vote on the 2013 budget. European Commission spokesman Simon O’Connor said today that the vote will be another “crucial” step toward freeing up rescue funds.

Policy Decisions

The Greek government is working “in a good and constructive spirit” with the troika, comprising the commission, the European Central Bank and the International Monetary Fund.
“We certainly hope and expect that we will be able to conclude this work in the coming days and to work toward what we hope will be policy decisions on Monday at the eurogroup,” O’Connor said.
Greece has received 240 billion euros in aid pledges from the EU and the International Monetary Fund since 2010.
To contact the reporter on this story: Craig Stirling in London at cstirling1@bloomberg.net
To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net

  http://www.bloomberg.com/news/2012-11-08/greek-aid-payment-call-won-t-be-made-next-week-eu-official-says.html?alcmpid=breakingnews