Officials: New Greece tranche delay likely

Nov. 12, 2012 at 2:30 AM
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BRUSSELS, Nov. 12 (UPI) -- Eurozone finance ministers were unlikely to approve a $40 billion payment to Greece Monday because Greece's path to sustainability was unclear, officials said.

A delay at the Brussels meeting, on top of months of other delays, would come a day after the Greek Parliament voted to approve a 2013 budget that activates a $17 billion austerity package Greece's fragile coalition government approved last week in an effort to win the critical bailout funds.

Greece says it needs the bailout money this month or it could go bankrupt. Bankruptcy could force Greece to leave the 17-nation eurozone and threaten the viability of the currency, economists say.

The budget, which provoked angry protests among Greeks, includes sharp cuts to pensions, salaries and social services, as well as tax increases and raising the retirement age from 65 to 67. It also makes it easier to fire and transfer civil servants who, until now, were guaranteed jobs for life.

Greece's unemployment rate is more than 25 percent.

Athens says the cutbacks will contribute to a 4.5 percent contraction in 2013, but many economists argue the damage could be much greater.

Greece has made "enormous efforts" to implement the austerity and reform measures needed to get its next bailout installment, a eurozone official told The New York Times ahead of the finance ministers' meeting, but "there is a very, very high degree of plausibility that there will need to be a second round of discussions in order to finalize everything."

The ministers Monday were expected to review a draft report on the Greek economy from the European Commission, International Monetary Fund and European Central Bank.

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