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Greece gets more time, waits for cash
By Mark Thompson
@CNNMoney
November 13, 2012: 12:47 PM ET
Greece wins reprieve, but lenders have still to approve next payment.
LONDON (CNNMoney) -- Eurozone finance ministers have agreed to give
Greece two more years to meet fiscal targets attached to a second
sovereign bailout, but will not release the next installment of rescue
funding for at least another week.
The delay prompted Athens to auction more short-term debt Tuesday to cover Treasury bills that fall due Nov. 16.
The Eurogroup, which brings together finance ministers from the 17
eurozone nations and European Central Bank President Mario Draghi, said
new austerity measures and a 2013
budget adopted
by the Greek parliament demonstrated the resolve of the
recession-ravaged nation to get its debt-cutting efforts back on track.
Greece was forced to seek a second bailout from the so-called troika of EU,
ECB
and International Monetary Fund in March as it buckled under the weight
of debt now projected to hit 190% of gross domestic product next year.
But payments were suspended after months of
political turmoil left Athens way off its reform and fiscal targets set
by the troika.
Greek Prime Minister Antonis Samaras and his
coalition have spent the last four months working with international
creditors to agree on
revised targets for bringing the country's debt back to a sustainable level.
The Eurogroup Monday praised Greece for developing new mechanisms to avoid any further slippage.
"Against this background, the Eurogroup concludes that the revised
fiscal targets, as requested by the Greek government and supported by
the troika, would be an appropriate adjustment for the further path of
fiscal consolidation in view of recent economic developments," it said
in a statement.
Related: Greece's misery won't end with bailout vote
But the troika has so far been unable to agree on how to plug the
funding gap created by giving Athens until 2016, rather than 2014, to
generate a primary budget surplus before debt financing of 4.5%. The
gap is estimated at around 30 billion euros.
With the troika unwilling to consider putting
more money on the table or to take losses on existing loans to Greece,
attention had turned to other measures, including cutting rates on
previous lending and tweaking a debt-to-GDP target of 120% by 2020 --
seen as the level at which Greek debt could be sustained.
"Together with the review of the Greek
adjustment program, the Eurogroup will further discuss financing needs
and debt sustainability, at an extraordinary meeting that will be
convened on 20 November," the Eurogroup said.
Assuming agreement at that meeting, and a
positive final assessment by the troika, Athens should be able to
receive the next installment of 31.5 billion euros, which Greece says
it needs to redeem short-term debt and recapitalize its banks.
Greece has to redeem 5 billion euros of Treasury bills Friday and had been hoping to use bailout funds for that purpose.
Instead, it covered 80% of the exposure by holding two T-bill auctions
Tuesday, raising just over four billion euros. The Greek debt
management agency added that it would accept further bids for about one
billion euros in short-term debt by Thursday.
manalysis
And
yet at this moment—indeed since July 2011—our National Guard soldiers,
in conjunction with German, Austrian, Hungarian, Croatian and other Axis
allies, have their guns trained on the reluctant Serbs, in preparation
for a final solution to the “northern problem.”
In
September there was an explosion after a service at a destroyed church,
attended by displaced Serbs who were visiting the ruins of their homes;
on the way back one of the houses was on fire. This is why, when
refugees come to tend the overturned graves of their loved ones, an
ambulance is on hand.
