Greece likely to get additional funding

13:54, June 04, 2011      

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A senior eurozone official indicated on Friday that the debt-laden Greece is likely to get more financing in addition to the existing bailout fund.

"I expect the eurogroup to agree on additional financing to be provided to Greece, under of course strict conditionality," Luxembourg Prime Minister Jean-Claude Juncker, who heads the eurogroup of 17 eurozone finance ministers, said today after a meeting with Greek Prime Minister George Papandreou.

Juncker made the remarks as auditors from the European Commission, the European Central Bank and the International Monetary Fund concluded a month-long review of Greek finances.

The auditors said Greece is due to receive the next 12-billion-euro (17.4-billion-dollar) tranche of its existing 110-billion-euro (159-billion-dollar) bailout this July, but needs to swiftly introduce further austerity and structural reform measures to fend off its sovereign debt crisis.

The EU and the IMF agreed on a 110-billion-euro bailout of Greece in May last year after the eurozone country could not refinance its mountain debts in the markets. In return, Athens has to take ambitious measures to bring its house back in order.

But after a promising start, the Greek plan to exit the crisis has gone off track due to recession, a shortfall on revenues and delays in the implementation of structural reforms.

Speculation mounted recently that Greece would have to restructure its debts sooner or later, forcing the EU to consider further support to Athens.

Juncker said the additional bailout would for the first time include involvement of private creditors such as banks and investment banks on voluntary basis and they would be asked to share the burden of giving Greece more time to pay back the debts.

"This conditionality will include private sector involvement on a voluntary basis and this private sector involvement will have to be negotiated with private creditors," Juncker said.

Source: Xinhua

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