EU demands more despite Greek accord

BRUSSELS / ATHENS - Reuters

A woman suffering from teargas passes a defaced Bank of Greece sign during yesterday’s protests in Athens. REUTERS photo

Eurozone finance ministers have demanded more steps and a parliamentary seal of approval before providing aid to Greece even as the country’s political leaders have reached consensus on a deal on economic reforms to secure a second EU bailout.

The European Union and the International Monetary Fund (IMF) are exasperated by a string of broken promises by Athens and weeks of disagreement over the terms of a 130 billion euros bailout, with time running out to avoid a default.

Finance ministers at the 17-nation eurozone meeting in Brussels warned that there would be no immediate approval for the rescue package and said Athens must prove itself first.

Jean-Claude Juncker, who chairs the Eurogroup, set three conditions, saying the Greek Parliament must ratify the package when it meets on Feb. 12 and a further 325 million euros of spending reductions needed to be identified by next week, after which eurozone finance ministers would meet again.

“Thirdly, we would need to obtain strong political assurances from the leaders of the coalition parties on the implementation of the program,” Juncker told a news conference after six hours of talks in Brussels. “Those elements need to be in place before we can take decisions. In short, [there will be] no disbursement before implementation.”

Facing elections as soon as April, Greece’s party leaders have been loath to accept the lenders’ tough conditions, which are certain to be unpopular with increasingly angry voters.

Greek Finance Minister Evangelos Venizelos left the Brussels talks quickly, telling reporters Greece faced a choice of staying in the euro or leaving.

“Until the next Eurogroup, which will most likely convene on Wednesday, our country, our people should think and make a final strategic choice,” he said, saying a critical decision needed to be made over private sector bondholder losses (PSI).

“If we see the future of our country within the eurozone, within Europe, we should do what we have to do for the program to be approved and for the PSI to be concluded on time before major bonds expire in March.”