Greek leaders blow chance of quick EU bailout approval

Tue Feb 14, 2012 6:46pm EST
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By Luke Baker and Dina Kyriakidou

BRUSSELS/ATHENS (Reuters) - Euro zone finance ministers have dropped plans for a special face-to-face meeting on Wednesday on Greece's new international bailout, saying political party chiefs in Athens had failed to provide the required commitment to reform.

A day before euro zone finance ministers had been due to meet in Brussels to consider the bailout, the man most likely to be Greece's next prime minister had yet to sign a commitment to implement the austerity measures demanded by the EU and IMF.

Likewise, the cabinet had yet to fill a 325 million euro ($427 million) gap in the budget cuts promised for 2012, even though the ministers of the Eurogroup had told Athens that they needed a complete package of promises and signed undertakings.

With the European Union's patience with Greece close to breaking point, Eurogroup Chairman Jean-Claude Juncker downgraded Wednesday's talks to a telephone conference call.

That appeared to kill any chance that the Eurogroup would approve on Wednesday the 130 billion euro bailout, funds from which Greece must start getting by next month to avoid a messy bankruptcy. It is due to hold a regular meeting on February 20.

Juncker said he was awaiting written undertakings from Greek party leaders on pushing through with the austerity package of pay, pension and job cuts - which parliament passed early on Monday as rioters wrecked buildings across central Athens.

"I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program," he said in a statement.

A source familiar with the bailout negotiations said conservative leader Antonis Samaras had yet to sign the commitment to implement the deeply unpopular austerity package, a condition set by the EU/IMF lenders who are weary of broken Greek promises on economic reform and budget cuts.   Continued...

A man walks past the Bank of Greece as cleaning works are in progress after Sunday's violent protests which followed the Greek parliament approval of a deeply unpopular austerity bill in Athens February 14, 2012.   REUTERS/Yiorgos Karahalis