Europe

Greece lenders to address funding gap

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Greek Finance Minister Yannis Stournaras says the country’s foreign lenders are expected to agree in December on how to meet its 2014 funding shortfall.

“We have discussed all the options and decisions will be taken in December,” Stournaras said in the capital Athens on Wednesday following talks with Thomas Wieser, the head of the Eurogroup working group that prepares decisions at meetings of the eurozone’s finance ministers.

Athens was first granted a 110-billion-euro ($145 billion) bailout by the troika of international lenders — the European Union, the European Central Bank (ECB), and the International Monetary Fund (IMF) — in May 2010.

Another 130-billion-euro ($170 billion) rescue package was approved in February 2012, which had been designed to see it through 2014 but a funding gap has emerged for the second half of the year.

The European Commission puts the shortfall at 3.8 billion euros ($5.14 billion) and the IMF at 4.4 billion euros ($5.95 billion).

On Monday, the ECB rejected a bond rollover proposal, put forward by Greece in an effort to fill the gap, saying it would contravene ECB law.

“There is no way it can be covered by bond rollovers,” said Joerg Asmussen, an ECB executive board member ahead of a meeting of eurozone finance ministers in Luxembourg.

Instead, Asmussen called on the Greek authorities to come up with alternative remedial methods such as a slow privatization program.

However, a different Finance Ministry official said on Wednesday that the proposal was still on the table.

A second ministry official said, “The issue of the fiscal gap will be examined extensively with the troika in the coming days and we hope to reach a solution.”

Thousands of Greeks have been staging protests across the country against the harsh austerity measures imposed as a result of the two bailouts.

“There is no room for new, across-the-board fiscal measures… Since we are fulfilling our commitments we expect our partners do the same,” said Simos Kedikoglou, the government’s spokesman on Wednesday.

Greece has been at the epicenter of the eurozone debt crisis and is experiencing its sixth year of recession, while harsh austerity measures have left tens of thousands of people without jobs.

Many Greek workers are currently unemployed, banks are in a shaky position, and pensions and salaries have been slashed.

The European financial crisis began in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland, and Spain.

The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered massive demonstrations in many European countries.

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