European governments clashed over options to help Greece meet its short-term cash needs while it waits for a eurozone bailout deal to be finalized, officials said yesterday.
Britain, which does not use the euro, has already said it would resist contributing to any bridge financing to get Greece through several huge debt repayments while details are settled after Monday’s hard-won agreement.
“I can confirm that concerns were raised by several non-euro member states; this is something we will have to take into account,” European Commissioner for the Euro and Social Dialogue Valdis Dombrovskis said after a meeting with European finance ministers.
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“Pretty much all options are quite difficult and have political, legal and financial complications,” the former Latvian prime minister said.
Bilateral loans are another option that have been raised, but like the others that would pose difficulties, European ministers said.
Finnish Finance Minister Alexander Stubb said it would be “difficult for any member states putting fresh money without conditionality.”
Greek Prime Minister Alexis Tsipras struck an 85 billion euro (US$94 billion) bailout deal with his eurozone partners on Monday that involves painful reforms and a parliamentary vote by today on key austerity measures.
However, the deal will take at least four weeks to finalize and implement, and Greece’s creditors estimate Athens needs 12 billion euros to get through the middle of next month.
Greece owes the European Central Bank (ECB) 4.2 billion euros, which are due on Monday next week, and a default would force the ECB to cut off emergency loans keeping Athens banks afloat.
Greece on Monday already missed a second debt payment to the IMF in two weeks, bringing its arrears to the fund to 2 billion euros.
British Chancellor of the Exchequer George Osborne reiterated that he would refuse any attempt to use EU rescue cash to bridge the financing gap.
“Britain is not in the euro, so the idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter,” Osborne said in Brussels.
Britain believes that the European bloc in 2010 agreed to no longer tap an EU-wide emergency fund, the European Financial Stabilization Mechanism (EFSM), to underwrite bailouts of eurozone countries.
Reports said that France as well as the European Commission were pushing to turn to the fund and would only require a weighted majority of member states to do so.
An EU source said that using the EFSM remained one of the “most feasible options” to help Greece survive the cash crunch and urged Britain to give ground on the issue.
In another option that would certainly prove to be controversial, German Finance Minister Wolfgang Schaueble proposed that Greece issue IOU’s to pay pensions and other domestic bills, thereby saving its scarce euros for debt payments.
However, the creation of IOU’s is also seen as a first step toward the return of the Greek drachma, and risks rekindling talk of a Greek exit.
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