Brussels, 27/05/2011 (Agence Europe) - The European Commission is awaiting the report by Greece's international creditors (the European Commission/European Central Bank/International Monetary Fund) before deciding on any change to the amount of financial aid offered to the country. A Commission spokesperson said on Friday 27 May 2011 that the Commission was aware of the situation but a fact-finding mission by the international creditors was in Athens to discover whether the criteria have been met for payment of the next batch of aid (EUR 12 billion) and the Commission was waiting for the fact-finding mission report, which was not yet available. The spokesperson added that there was no point putting the cart before the horse.
On Thursday 26 May 2011, the head of Eurogroup, Jean-Claude Juncker, expressed concern that the IMF might refuse to provide its share (just over EUR 3 billion) of the EUR 12 billion euros due to be paid out at the end of June if Greece fails to demonstrate its financial capabilities for 2012. Under IMF rules, it can only provide aid for a one-year period, explained Juncker, doubting that the European Commission/ECB/IMF would be able to come up with such a guarantee. A spokesperson for the Commission said that the rule was nothing new and applied to all IMF financial aid programmes.
Juncker went further, saying that if the Europeans discovered that on 20 June that the IMF funding due to be released by the IMF on 29 June was not was not going to be forthcoming, then the IMF would expect the Europeans to pay the IMF's contribution themselves. But, he said, this would not be feasible because of reluctance by parliaments in Germany, Finland, the Netherlands and elsewhere. The total aid package for Greece, of EUR 110 billion over three years, is divided as follows: EUR 80 bn from eurozone countries in the form of a bilateral loans and EUR 30 bn from the IMF. Juncker said that the IMF would unveil at the beginning of next week its analysis of Greece's capacity to meet the budget targets of reducing the public deficit to 7.5% of DGP in 2011 (a 3% reduction on 2010), but its analysis of wehther Greece will be able to pay its debts longer-term is not expected until a later date. No decisions will be taken until the international creditors have all the facts at hand.
G8. Ruling out any idea of restructuring the Greek debt, the President of France, Nicolas Sarkozy said it would be good for private investors to bear their share of the burden of the Greek debt. He was speaking in Deauville, France, on Friday after the G8 Summit. Sarkozy said that the question was whether one could come up with a way of getting private agents and partners to share the burden Restructuring was not being discussed at all, he said, saying that agreement was needed instead on private sector burden-sharing. Herman Van Rompuy, the President of the European Council, and President Barroso of the European Commission, say that the G8 acknowledged and recognised Europe's role in tackling the cause of the sovereign debt crisis. Van Rompuy said Europe would do everything to ensure that no country went bankrupt (M.B./transl.fl)