Greece wins creditors' plaudits for sticking to austerity
Jean-Claude Juncker - Photo EU Council
(BRUSSELS) - Eurozone finance ministers went into talks on Monday to discuss next steps to bring Greece back from the brink after Athens received a "positive" report card from its international creditors for sticking to austerity.
The payment of a 31.2-billion-euro tranche of funds to stave off bankruptcy in Greece had been held up since June pending judgment on the credibility of its economic reforms, and debt sustainability.
But the long-awaited report from Greece's "Troika" of creditors -- European Union, European Central Bank and International Monetary Fund -- was "positive" and concluded that Athens had "delivered" on its reform pledges, said Jean-Claude Juncker, who heads the Eurogroup of finance ministers.
Arriving for talks between the 17 eurozone finance ministers later in the day, Juncker said they finally received the report Sunday night and it "is positive in its fundamental tone because the Greeks really delivered. Now it is for us to deliver".
Germany, apparently seeking to play down the positive spin, cautioned that only parts of the key document had been made available, meaning there would be no quick decision on whether to hand a lifeline to the debt-wracked nation.
"We are waiting for more information today," Finland's minister Jutta Urpilainen said on arrival. "Then we will see if we're able to make decisions today or later this week.
Juncker, who is Luxembourg premier, said a new austerity package adopted by the Greek parliament Wednesday and a cost-cutting 2013 budget agreed late Sunday were "very ambitious" and "fulfills our wishlist nearly completely".
But there would be "no definitive decision" today, he said, on the release of funds which Prime Minister Antonis Samaras had said were needed by Friday to keep Greece afloat.
Monday's talks come after the Greek parliament, despite noisy protests, agreed a tough budget for next year that further slashes pensions and wages, the latest hurdle cleared by Athens in exchange for foreign aid.
Last week lawmakers adopted a new austerity package as 70,000 angry demonstrators spilled into the streets.
As discontent mounts over austerity across Europe, Spain's banks announced they will freeze mortgage-related evictions for two years in cases of extreme need as a public outcry mounted over suicides by desperate homeowners.
And in Portugal, trade unions and opposition parties planned protests against a visit by German Chancellor Angela Merkel, the leading proponent of spending cuts as the answer to the euro debt crisis.
"Of course a programme of its kind sparks major debate," Merkel said of Lisbon austerity moves that sent thousands of soldiers into the streets this weekend.
"It is a long and hard process and I know it requires many sacrifices."
The new Greek budget provides for a deepening of the worst recession seen by a European nation in modern history.
Debt is likely to rise to 189 percent of GDP next year, almost double the country's national output, with growth tipped to shrink by 4.5 percent.
Facing a recession which has shrunk the economy by a fifth, Samaras has warned the country cannot take more austerity and must have growth.
Given Greece is sticking to demands from its creditors, it may win a two-year extension to 2016 to meet targets for reducing its debt and bringing its public deficit under 3.0 percent of GDP.
"Do we give them two more years or not? I am in favour of doing that," Juncker said.
But if there were a decision to give Athens a two-year extension "from that emerges financing questions, if not a gap," he added.
The gap has been estimated at up to 30 billion euros, a substantial sum as bailout-weary nations such as Germany, Finland and the Netherlands grow increasingly reluctant to rescue weaker euro states.
Any decision to extend Greece's deadline would also require parliamentary approval in Germany, the Netherlands and Slovakia.
Though Samaras had said Athens could run out of money by November 16 failing the release of the 31 billion euros in aid, the country announced Friday that it would sell short-term bills the same day, seeking to cover maturing debt.