Sunday, 18 September 2011

Euro debt crisis

Greece under pressure as finance ministers put brakes on bailout


Decision on €8bn Greek bailout delayed till October, while US secretary of state Geithner urges eurozone leaders to do more
European finance ministers on Friday heaped pressure on the Greek government to accelerate its privatisation programme and implement deeper spending cuts, after they told Athens a crucial €8bn (£6.9bn) bailout payment would be delayed until next month.

Luxembourg prime minister Jean-Claude Juncker, who chaired a meeting of the eurogroup of single currency finance ministers in Poland on Friday, said officials recognised the renewed efforts by Greece to meet its fiscal targets, but a decision on releasing the next tranche of cash would not be taken until October.

The move was met with incredulity by Greek officials. They have already warned they will be out of money by mid-October and are reported to be making contingency plans to lay off public sector workers.

US secretary of state Tim Geithner, who flew to Poland on Friday to emphasise Washington's fears of a second financial meltdown, urged eurozone countries to expand their bailout fund to better tackle the debt crisis. He warned the debt crisis posed a "catastrophic risk" to financial markets and added "What is very damaging [in Europe] from the outside is not the divisiveness about the broader debate, about strategy, but about the ongoing conflict … You need … to work together to do what is essential to the resolution of any crisis."

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