Greece may get €8bn bailout cash despite missing its key targets
Published 04/10/2011 | 05:00
EUROPE's finance ministers last night held off making any firm commitment to Greece ahead of a review of the country's finances, but sources said Athens could get its next whack of bailout cash even though the country will miss key targets.
The news came as a meeting of Europe's finance ministers was once again overshadowed after Athens announced on Sunday night that it would not hit its 2011 deficit targets.
Greece now expects its 2011 deficit to be 8.5pc of gross domestic product, against the 7.6pc target set down in its €110bn rescue programme agreed with the European Union, the European Central Bank and International Monetary Fund.
But well-placed sources last night said that missing the target would not necessarily mean Greece would be refused the €8bn tranche of aid due to be drawn down over the coming weeks.
Greece may be forgiven if the deterioration is solely the result of changes in the wider economic environment rather than the Greek administration's inaction, sources said.
The so-called troika is also mindful of the fact that there is very little time left for Greece to correct any issues with 2011's finances, so it would be pointless to push the administration to come up with billions more.
Officials stressed that no decision on Greece's future aid will be taken until the troika completes its review some time next week.
A meeting of finance ministers has been "provisionally" pencilled in for next Thursday to discuss the review's findings.
Arriving at yesterday's meeting, Greek finance minister Evangelos Venizelos insisted his country had "decided all the necessary and difficult measures to fulfill its obligations".
"Greece is a country with structural difficulties but Greece is not the scapegoat of the euro area," he said.
"Greece is a proud country. We have the potential and ability to go ahead despite the cumulative recession of 12pc of GDP in the last three years."
The EU's economics chief Olli Rehn praised the "very important decisions" Greece had taken in recent weeks, but said it was too early to know whether it had done enough to secure its next batch of aid.
US Treasury Secretary Timothy Geithner has already urged Europe to increase its efforts and leverage the bailout fund, the EFSF, while Britain's chancellor of the exchequer George Osborne yesterday told a conference the fund needed "maximum financial firepower".