LUXEMBOURG--A decision on a much-needed 31.5 billion euro ($40.7 billion) bailout tranche for Greece, withheld since June, can be expected in November at the latest, European Union Economics Chief Olli Rehn said Tuesday.
A two-year extension to Greece´s fiscal targets -- reaching a 4.5% gross domestic product primary surplus -- will "have to be considered" by euro-zone finance ministers. He said that the European Commission had "a certain view" on this but he preferred to make it public when he had to make a formal recommendation to the euro-zone finance ministers´ group. EU officials have said that the European Commission is in favor of such an extension. But there is no agreement among Greece´s creditors over how the financing gap that such an extension would create could be filled.
With Greece saying it runs out of cash sometime in November, it had previously been hoped that the sizeable loan slice, earmarked for bank recapitalization and other payments, would come in October. But a review of Greece´s compliance with its obligations under its program is still underway in Athens. The heads of the team of experts from Greece´s troika of creditors --the European Commission, the European Central Bank and the International Monetary Fund -- were in Luxembourg Monday to brief euro-zone finance ministers on the Greek situation.
Euro-zone officials described the discussion that followed the presentation as "heated".
The Greek government, currently scrambling to get together a convincing package of savings worth EUR13.5 billion, will have to "legislate and implement" a list of 89 so-called "prior actions" before it can hope to get the funding it needs, Mr Rehn said.
The list includes some purely administrative actions the Greek government needs to complete as well as some tougher structural reforms, which may be harder to push through quickly.
Mr Rehn said Greece would have to do that "in the coming weeks," while the head of the euro-zone finance ministers´ group, Jean-Claude Juncker, had said the night before at a press conference that the country had to show "commitment" to those prior actions by the EU leaders´ meeting scheduled for Oct. 18.
Mr Rehn was speaking at the margins of an EU finance ministers´ meeting in Luxembourg.
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(END) Dow Jones Newswires
October 09, 2012 07:05 ET (11:05 GMT)
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