Brussels, 07/11/2011 (Agence Europe) - The Eurogroup is not expected to take any decisions on the payment of the next instalment of aid to Greece (€8 billion from the IMF and EU), cash needed to prevent the country defaulting on its debts next month. Upon his arrival in Brussels on Monday 7 November, the head of the Eurogroup, Jean-Claude Juncker, said he didn't think there would be any final answer from the Eurogroup about the payment of the sixth instalment of the first Greek bailout. Financial aid has been put on hold and releasing it, he said, would depend on the response of the Greek government. Europeans want to ensure that the new Greek government will back the agreement reached at the eurozone summit of 27 October and will put together a budget for next year that will meet the budget objectives set out in the rescue programme. Juncker commented that he was confident that the situation in Greece was now changing for the better.
Although he won the confidence vote at the Greek parliament on Friday, Prime Minister George Papandreou has resigned because of the impact of his plan to hold a referendum on the rescue package, which would have jeopardised Greece's future in the eurozone. He will be able to leave with his head held high because his manoeuvring has got the opposition New Democracy party to back the 27 October eurozone deal. “After a difficult week, we now have a new political situation, a new political frame in Greece. We have a new government of national unity and national responsibility. This is the proof of our commitment and our national capacity to implement the programme and reconstruct the country”, said Greek Finance Minister Evángelos Venizélos, who opposed the idea of a referendum when he returned to the G20 Summit in Cannes (see EUROPE 10488 and 10489).
Italy. The ministers will also discuss the situation in Italy, where there are rumours that the Italian prime minister, Silvio Berlusconi, is about to resign. At the end of last month, the Italian government agreed to tighter economic and budget controls by the European Commission, which will be sending economic experts to Rome later in the week. A spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn said that the Commission had sent a questionnaire to the Italian government and asked it to “clarify” the measures it is planning. He refused to draw any parallels between Italy and Greece. Under huge pressure from its international partners, Italy agreed at the Cannes G20 Summit to allow IMF inspections every three months to verify that the government is properly implementing the announced reforms. Rehn's spokesperson said the idea was to get a separate assessment by a number of institutions to boost confidence in Italy's ability to achieve its budget targets and introduce reforms.
Eurogroup will look at the plans to increase the EFSF bailout fund and, against the backdrop of inexorably rising interest rates for rolling over Italy's debt, they will speed up examination of what can be done to help. The troika of creditors (the European Commission, ECB and IMF) are in Portugal at the moment for the start of their second fact-finding mission about the country's economy. (MB/transl.fl)