EU insists Greek loans assured, despite Slovakian reticence

(BRUSSELS) - The European Commission insisted Tuesday that a multi-billion euro loan package for debt-laden Greece will go ahead despite reservations expressed by Slovakia, which wants to see welfare cuts by Athens first.

"I can assure you ... that we will be ready to meet the needs of Greece," said Amadeu Altafaj, commission spokesman on economic affairs.

"There is already a political decision by the Eurogroup to activate the mechanism," he told reporters.

The commission's comments came two days after finance ministers from the 16 countries that use the euro met in Brussels and agreed on a three-year 110-billion-euro (146-billion-dollar) loan package to help eurozone member Greece, including 30 billion euros from the International Monetary Fund.

The cash is needed to help Greece service its mountain of debt by offering loans at much lower rates than it can now obtain on the open market.

Altafaj admitted that "there is an issue of national sovereignty" and that national parliaments will have to "take their own position" on the loan deal.

However "our clear impression, shared by the finance ministers of the euro area, is we will no doubt have the critical mass in terms of provision of funds by mid may," the EU spokesman assured.

"All ministers of the euro area have committed to do so," in a veiled comment to Slovakia.

On Monday Slovak Prime Minister Robert Fico announced that his country would not consider providing rescue money to Greece unless the struggling country starts cutting its welfare spending,

"We can't give Greece any loan before we see them doing their homework," Fico told reporters in Bratislava.

Slovakia's share in the loan will exceed 800 million euros, according to the country's finance ministry.

The eurozone, which Slovakia joined as the last member in 2009, and the International Monetary Fund (IMF) endorsed on Sunday the bailout to save Greece from bankruptcy.

In exchange, Athens vowed a series of budget cuts and tax increases with the aim of slashing the public deficit to less than three percent of output by 2014, from 13.6 percent last year.

"Any decision on an aid package must follow an actual decision taken by the Greek parliament to cut back welfare benefits which the country can't afford," Fico said.

"Personally, I don't believe that the Greek parliament will be able to approve the restrictions passed by the government yesterday," he added.

According to a European source, the eurozone procedure rules out the possibility that a single member state can be forced to hand out loan money, but that neither may a eurozone nation "prevent anyone else for issuing" loans.

In that case Slovakia may decide not to offer its part of the rescue package without blocking the mechanism as a whole.

"Procedures will last longer in some member states than in others," said Altafaj.