EU Commission: No Deadline For Next Tranche Of Greece Aid
By Market News International || September 2, 2011 at 12:00 GMT
BRUSSELS (MNI) – There is “no deadline” for the disbursement of the
next tranche of Eurozone-IMF financial aid to Greece, a spokesman for
European Economic and Monetary Affairs Commissioner Olli Rehn said
Friday.
His comments came shortly after the news that inspectors from the
European Commission, the ECB and the IMF had left Athens unexpectedly —
purportedly to give Greece more time to complete “technical work,”
according to a joint statement from the three institutions. The
statement said Greece is expected to complete the work by mid-September.
The officials from the so-called troika are conducting a quarterly
review of Greece’s compliance with the stiff deficit cutting measures
required of it in exchange for the E110 bailout plan agreed in May 2010.
Disbursement of the tranche, about E8 billion of it from the EMU member
states, depends on a finding that Greece is making satisfactory progress
towards meeting its targets.
However, numerous reports out of Greece in recent days have
indicated that the troika now believes the Greek economy will suffer a
larger-than-expected recession and that, rather than meeting its deficit
target of 7.6% of GDP this year, the budget shortfall is likely to be
closer to 9%.
Markets, believing the departure of the troika was due to
dissatisfaction over Athens’ compliance, reacted sharply to the news.
Two-year Greek yields rose to an EMU-era record above 46%.
Rehn’s spokesman, Amadeu Altafaj Tardio, also clarified that there
is “no link” between the troika’s mission in Greece, which is related to
official bailout aid, and separate negotiations between Athens and its
private creditors regarding a planned exchange of outstanding Greek
government bonds for new ones with lower interest rates and longer
maturities.
Earlier this week, Greek officials raised doubts that the planned
debt swap would go ahead if the private sector participation rate fell
short of the 90 percent level it is targeting.