Greece told it must meet targets before getting any more aid
Published 16/09/2011 | 05:00
Greece will have to make good on spending and reform targets before it gets any further EU aid, the bloc's economics supremo has said.
Olli Rehn told reporters yesterday that the "ball is now in the Greek court" and that the government needs to prove to its international lenders that it is serious about meeting this year's deficit limit.
"The ball is now in the Greek court in a sense that it is essential that Greece will take the necessary decisions and fully fill the fiscal gap that has emerged in the course of this year," Mr Rehn said.
"It is now essential they go all the way and convince their partners so we can expect a decision to be taken by the euro area and the IMF in time before the next period of refinancing will emerge," he added.
Greece is awaiting an €8bn portion of last May's €110bn EU-IMF bailout in order to pay off a series of debts maturing in October and November.
To secure the money, it has to prove it is on track to meet a deficit target of 7.5pc of GDP this year, a goal that was thrown into doubt following a worse-than-expected blow to economic growth this year and sluggish progress on privatisations.
Talks between Athens and bailout officials from the Commission, European Central Bank and International Monetary Fund broke down last week after it emerged that there was a €1.7bn hole in the 2011 budget.
The disagreement harks back to last May, when the IMF threatened to withhold its share of the bailout over concerns about the government's €350bn debt mountain.
The Socialist government was then bounced into a new, three-year €28bn austerity plan and €50bn privatisation drive.
Elected officials have also agreed to forego a month's pay to make sure there is still cash in the coffers.
It is still unclear when the troika will return to Athens, with EU officials saying that no date has yet been set. Mr Rehn said he hoped an agreement could be concluded by the end of the month.
Finance ministers are meeting today in Wroclaw, Poland, to thrash out the remaining problems with a second, €109bn bailout for the beleaguered Mediterranean state, which was inked on July 21.
Progress on that plan has been frustrated by disagreements over the extent of bondholder involvement and how to secure collateral against the Finnish portion of the loan.
US Treasury Secretary Tim Geithner will also attend the Wroclaw meeting.