Greece wins more time but no immediate aid

Mon Nov 12, 2012 6:37pm EST
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By Jan Strupczewski and Annika Breidthardt

BRUSSELS (Reuters) - Greece's international lenders agreed on Monday to give the country two more years to make the cuts demanded of it but the euro zone and IMF clashed over a longer-term target date to shrink the country's debt pile.

Euro zone finance ministers gathered in Brussels did not disburse more aid to the debt-ridden country and by granting a request from Athens for more time, face an extra funding bill of around 33 billion euros, according to a document prepared for the meeting.

"The Eurogroup concludes that the revised fiscal targets as requested by the Greek government and reported by the troika would be an appropriate adjustment," Jean-Claude Juncker, the chairman of euro zone finance ministers, told a news conference after nearly six hours of talks.

Juncker said a further Eurogroup meeting would take place on November 20 while officials said more negotiations could be required the week after that to nail down a new deal.

Despite Greece approving a tough 2013 budget last week, which it hoped would meet conditions for the release of a tranche of 31.5 billion euros of emergency loans under its second bailout program, its lenders still need to agree on how to make its debts sustainable into the next decade.

International Monetary Fund chief Christine Lagarde said more work was needed to cement the budget measures.

"That ... (budget law) clearly needs to be reviewed a little bit, to make sure that all prior actions contained in that budget law are actually taken," she told the same news conference. "There will be a few, only a few additional prior actions to be verified in the coming days."

A compliance report by the European Commission, the IMF and the European Central Bank, together known as troika, calculated that giving Greece two more years to meet its immediate debt-cutting targets would leave a funding hole of 32.6 billion euros to be filled up to 2016.   Continued...

Spain's Economy Minister Luis de Guindos (C), Luxembourg's Prime Minister and Eurogroup Chairman Jean-Claude Juncker (L) and International Monetary Fund (IMF) Managing Director Christine Lagarde (R) attend a Eurogroup meeting in Brussels November 12, 2012. REUTERS/Yves Herman