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Decision on New Greek Bailout Funds Delayed Until October

Eurozone chief Jean-Claude Juncker

Eurozone chief Jean-Claude Juncker says the 17 countries using the European common currency have delayed until October a decision on an 8 billion-euro installment of a bailout loan for Greece.
The tranche is seen as needed to keep Greece from a disastrous debt default. But officials from the eurozone and the International Monetary Fund (IMF) have delayed their assessment amid questions about whether Athens is doing enough to cut the country’s deficit.
Juncker, speaking at a news conference in Wroclaw, Poland, after a meeting of eurozone finance ministers, said officials welcomed “the renewed, firm commitment of Greece” to its austerity program, but they “would decide in October on the next tranche.”
The talks were also attended by U.S. Treasury Secretary Timothy Geithner, whose presence at the meeting in the city of Wroclaw is seen as a sign of the gravity of the eurozone’s debt crisis.
In a closed address, Geithner reportedly warned that deepening divisions in the eurozone over the Greek debt posed a “catastrophic risk.”
Finnish obstacle
On Friday, Finnish Finance Minister Jutta Urpilainen reiterated her country’s demand for collateral in return for new loans in connection with the second bailout of Greece – a major obstacle to the deal.
“I think we are going to negotiate about it [collateral] but unfortunately I don’t see that we can find a solution [on Friday],” Urpilainen told reporters.
“We continue to negotiate, I’m optimistic that we can find a solution that everybody can accept.”
Venizelos: Structural Changes Are Critical
Greek FinMin stressed the need for implementing the agreement of July 21, after a Eurogroup meeting on Friday.
“It is vital for Greece. The global environment fuels uncertainty, which affect the implementation of Eurozone’s decisions and Greek policymakers’ performance”, said Evangelos Venizelos in Poland.
“This vicious circle must break”, he stated.
Venizelos said that he informed the Eurogroup for the tough decisions that the Greek government has made in order to achieve the budgetary target for 2011 and 2012.
But, there is great mistrust for Greece, because of the structural characteristics of the Greek State, said the Minister.
“Thus, structural changes are of critical importance: shrinking public sector and public spending, privatizations, deregulation of labour market, strengthening competitiveness of the country”, said Venizelos, also Deputy Prime Minister.
Eurozone member states proceed with the ratification of the new institutional framework of the EFSF, while the debt swap program PSI is advancing normally, according to Evangelos Venizelos.
“Our obligation is to do anything to protect the country” he added.
(source: AFP, AP, Reuters)

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