With no agreement between the Greek government and international lenders over lagging reforms, it now appears that continued aid to the country could be given out in smaller doses.
Greece was hoping for release of an 8.1 billion euro ($10.6 billion) installment but envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) said they are unsatisfied with a lack of progress in several areas, including firing public workers and a 1 billion euro ($1.3 billion) health care deficit.
The EU’s finance chief, Olli Rehn, said the lenders will probably hand out the aid piecemeal, forcing the government to live check-to-check until more progress is made. Athens was hoping the Troika would agree to releasing the full installment before a July 8 meeting of Eurozone officials, but admitted it had failed to meet deadlines.
“It is possible, but not certain,” Rehn told a seminar in his hometown of Mikkeli, Finland, when asked about putting Greece on more installments. “It all depends on whether Greece can meet all requirements that they are committed to.” In Athens, a Greek finance ministry official said the two sides were “close” to a deal although it had missed a July 5 target to prove reforms were underway.
Rehn said that talks involving the Troika would “continue as long as needed” which isn’t good news for Prime Minister Antonis Samaras’ hopes of trying to get the economy again and eventually out from under a crushing $390 billion debt built by decades of government overspending and hiring hundreds of thousands of needless workers in return for votes.
Greece has spent a first bailout of $152 billion begun in 2010 without making a dent in its deficit or debt and is now going through a second for $173 billion with little visible progress and is reliant on foreign aid to stay alive.
The deal runs out at the end of 2014, but for now, Greece needs continued loans so it can pay back banks and investors, including a 2.2 billion euro bond ($2.82 billion) redemption due in August.
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