Greece lenders won't talk aid until Oct.

Aug. 9, 2012 at 3:30 AM
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BRUSSELS, Aug. 9 (UPI) -- International lenders won't discuss new Greek aid until October, a month later than promised, because Athens hasn't made enough cuts, a European official said.

The delayed review, now scheduled for a eurozone finance ministers meeting in Luxembourg Oct. 8, would determine whether Greece is eligible for $38.4 billion in fresh aid, including $31 billion to recapitalize its cash-strapped banks.

Greek Deputy Finance Minister Christos Staikouras said July 31 Athens' cash reserves were "almost at zero" and if it didn't get the next bailout installment in the next few weeks, it would likely not be able to meet its commitments.

"It's not possible to say how long [the cash reserves] will last because that depends on the budget execution, but we are close to the brink," he told state-owned New Hellenic Television.

The looming cash crunch means the twice-bailed-out nation might have to raise an extra $4 billion in treasury bills this month to cover a repayment due Aug. 20 on a bond held by the European Central Bank, the Financial Times reported.

Greece's three-party coalition government is arguing over deeply unpopular cutbacks, including government job cuts, as part of a required $14.3 billion in savings by 2014.

As a result, budgetary decisions have been inadequate, a European Union official told The Wall Street Journal.

"The member states need to have a clear picture of what's going on and where we are before deciding to start paying again," the official said.

In an effort to lock in concrete commitments that can be put into effect, experts from the so-called troika of Greece's official-sector creditors -- the European Commission, the ECB and the International Monetary Fund -- are to visit Athens in early September and "stay the whole month in order to report to the October Eurogroup," the official said.

The Eurogroup is the official name of the eurozone finance ministers meeting.

An earlier troika delegation, which left Athens Sunday, was "able to identify concrete measures" for $8.7 billion in cuts, the official told the Journal.

"In September, we'll need to work on the remaining $5.6 billion so that they're also concrete and implementable, not just fuzzy words," the official said.

The latest aid disbursement was originally due in June but was held up because Greece went through successive governmental elections, creating "considerable delays" in the program's implementation, the EU official said.

Prime Minister Antonis Samaras Wednesday sought to defuse growing coalition tensions, especially with the Democratic Left partner over possible government job cuts.

"We will not return to solutions that have failed in the past," he said. "We are looking at all options."

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