Eurozone finance ministers may not make a decision on unlocking funds for Greece until late this month as they await a full report on the country’s compliance with the terms of its bailout, an EU official said.
Finance chiefs will not make the call to release 31.5 billion euros (US$40.1 billion) of aid for Greece that has been frozen since June when they meet in Brussels on Monday, the official said on Thursday on condition of anonymity because the deliberations are private.
Ministers will await a final report from the so-called troika that oversees eurozone bailouts on Greece’s efforts to meet the conditions of its second bailout since 2010 before taking action, the official said.
While a preliminary version may be available for the meeting on Monday, it will not be enough for ministers to base their decision on, the official said.
Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy.
While German Chancellor Angela Merkel last month traveled to Athens to signal her willingness to keep Greece in the eurozone, the country is still struggling to reach its debt-reduction targets amid a combination of Greek political resistance to more cuts and a recession that has brought record unemployment.
“We’re not out of the woods yet,” German Finance Minister Wolfgang Schaeuble said in Hamburg yesterday. “I don’t see how we can take the decision already next week.”
The EU official said Nov. 26 is a possible date for eurozone finance ministers to sign off on the next disbursement of rescue aid to Greece.
A Greek government spokesman declined to comment when asked if a decision on the aid payment would be made at Monday’s meeting.
Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of a bill on pension, wage and benefit cuts needed for bailout funds to flow.
The vote occurred on the second day of a 48-hour general strike that shut down hospitals, schools and government services and brought public transport to a standstill. Apparent changes in privatization laws will need to be evaluated, the official said.
The parliament will convene again on Sunday to consider the budget for next year.
European Commission spokesman Simon O’Connor said that the vote will be another “crucial” step toward freeing up rescue funds.
The Greek government is working “in a good and constructive spirit” with the troika, which comprises the commission, the European Central Bank (ECB) and the IMF, he said.
“We certainly hope and expect that we will be able to conclude this work in the coming days and to work toward what we hope will be policy decisions on Monday at the eurogroup,” he said.
Greece has received 240 billion euros in aid pledges from the EU and the IMF since 2010.
Meanwhile, a potential Greek exit from the eurozone is still a risk and efforts by the ECB to ease the region’s debt crisis can only buy time for lawmakers to take action, according to Moody’s Investors Service.
Ending the financial woes in Europe will be a multi-year process because “there’s no quick fix,” Yves Lemay, a managing director at the ratings company, said yesterday in an interview in Brussels.
Greece leaving the euro “remains a risk and if it were to crystalize, that event would generate a significant economic event,” he said.
In related news, Spain’s growth outlook will be the key to the nation’s future credit grade, Lemay said, while the firm will give its view on France within a few weeks.