Greece says it has cleared bailout hurdles

Party leaders have met the final two demands set by the country’s international lenders, paving the way for a deal.

Greece bailout
Greece’s Venizelos, right, defended his country from attacks by Germany’s Schaeuble [AFP]

Greek party leaders have met the final two demands set by the country’s international lenders to seal a bailout, according to Evangelos Venizelos, the country’s finance minister.

Venizelos told reporters late on Wednesday that the cabinet had decided how to plug a 325-million euro ($422m) gap in a 3.3-billion euro ($4.3bn) budget cuts package which the EU and IMF are demanding in return for the 130-billion euro ($169bn) rescue.

Leaders of both parties Lucas Papademos’ coalition government had given written undertakings to implement the austerity measures, which have provoked strikes, protests and riots in Greece, Venizelos said.

Eurozone finance ministers, collectively known as the Eurogroup, had demanded both issues be settled before making a final decision on the bailout, Greece’s second since 2010.

Greece’s acceptance of the terms of the latest bailout could pave the way for a deal to be agreed at the next Eurogroup meeting on Monday, enabling Athens to secure access to the funds it needs to avoid bankruptcy when 14.5 billion euros ($18.8bn) of debt repayments fall due on March 20.`

“The big issue of the 325 million euros has been finalised and this helped the discussion,” Venizelos said following a lengthy telephone conference call with his eurozone counterparts.

The Eurogroup had been due to meet in Brussels but Jean-Claude Juncker, who chairs the group, scaled that down to a teleconference, complaining that Greek political leaders had failed to provide written commitments or plug the savings gap.

After the teleconference, Juncker issued a statement saying progress had been made, but provided few details.

He said the European Central Bank, IMF and European Commission had completed a report into Greece’s debt sustainability – a precondition for approving the bailout – and that he expected the Eurogroup to be able to take the necessary decisions on Athens at the next meeting.

“Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of programme implementation and to ensure that priority is given to debt servicing,” he said.

“On the basis of the elements that are currently on the table and the above-mentioned additional input, I am confident that the Eurogroup will be able to take all the necessary decisions on Monday 20 February.”

Written assurance

One of the outstanding issues had been a written commitment from Antonis Samaras, the leader of Greece’s opposition conservative party, that he will stick to the agreed programme if he wins elections expected in April.



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Samaras, who is ahead in the polls and widely tipped to be Greece’s next leader, delivered that letter on Wednesday.

“If New Democracy wins the next election in Greece, we will remain committed to the programme’s objectives, targets and key policies,” Samaras wrote.

But he said the fast-shrinking Greek economy must also be kickstarted into life and reserved the right to adapt details of the package accordingly – a hedge that could prove a sticking point for increasingly frustrated eurozone partners.

Amid growing impatience in some other European countries over Greece’s perceived slowness in signing up to the terms of the bailout, Venizelos said there were some within Europe who no longer wanted Greece within the eurozone. 

“There are now powers in Europe who are obviously playing with fire because they believe … that not all requirements will be met, and who may even want Greece out of the eurozone,” he told reporters in Athens.

Rioters torched buildings across Athens late on Sunday as the Greek parliamebnt passed the austerity bill, despite opposition from far-right former members of the coalition and factions within both conservative and socialist parties.

But after a series of broken promises since Athens was first bailed out in May 2010, trust is in short supply.

“When you look at the internal political discussions in Greece and the opinion polls, then you have to ask who will really guarantee [compliance] after the elections, and I find this very alarming.” ,” Wolfgang Schaeuble, the German finance minister told SWR2 radio.

That drew an angry response from Greek President Karolos Papoulias, who holds a largely ceremonial role.

“Who is Mr Schaeuble to insult Greece? Who are the Dutch? Who are the Finnish?” he said, referring to other northern European eurozone countries where some officials have questioned whether Greece should be bailed out.  

Greece is in its fifth year of recession and its economy has shrunk by 16 per cent since 2008. The country has already endured several rounds of austerity measures, pushing unemployment higher, and many there fear new cuts will only make the situation even worse.

Source: Al Jazeera, News Agencies