December 1, 2014 / 2:18 AM / 4 years ago

Germany's Schaeuble says ministers to discuss Greek credit line early December

BERLIN (Reuters) - Eurozone finance ministers will discuss in early December conditions for providing Greece with credit when its current aid program expires, German Finance Minster Wolfgang Schaeuble said on Sunday.

German Finance Minister Wolfgang Schaeuble makes a speech prior to a vote on the federal budget, at the lower house of parliament Bundestag in Berlin November 28, 2014. REUTERS/Hannibal Hanschke

Greece wants to quit the international bailout program by the end of the year, but has been at loggerheads with its lenders, the troika of the European Commission, International Monetary Fund and European Central Bank, over Greece’s projected budget shortfall next year.

“At the moment, the troika and Greece have to determine whether Greece has fulfilled the conditions for the payment of the final tranche of the current program,” Schaeuble told German public broadcaster ARD.

“Then we have to see what is necessary for next year after the current program has expired. Greece is in a better position than we assumed two years ago but it needs support on financial markets, so the thinking is in terms of a precautionary credit line, with certain conditions attached.”

Eurozone finance ministers will discuss the issue in Brussels the week after next, he said.

In early November, the ministers backed a credit line that would draw on 11 billion euros already granted to Athens to recapitalize Greek banks but never used. [ID:nL6N0SW7LE]

Greece is running short of time to reach a deal on its final troika review by a Dec. 8 deadline after talks in Paris ended last week without a solution.

Greek officials said the two sides were at odds over a 2015 fiscal gap, with the troika demanding further austerity measures, including a tax rise in the tourism sector.

Athens has acknowledged a risk of delay to its plan to exit from the bailout by the end of the year, but after five years of belt-tightening, it has ruled out imposing extra austerity cuts and hopes that an early bailout exit will boost its popularity.

Officials from the co-ruling PASOK party said on Sunday that the troika review would be finished on time.

“The negotiations are tough and unfold on several levels, but it will be completed in time ... without pension and wage cuts,” the PASOK officials said on condition of anonymity.

Germany’s Spiegel magazine reported on Sunday that there were two types of precautionary credit line that Europe could extend to Greece, and that the one with the stricter conditions would apply to Greece.

The Finance Ministry declined to comment.

Reporting by Alexandra Hudson; Additional reporting by Renee Maltezou in Athens; Editing by Aidan Martindale and Crispian Balmer

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