Lenders: Greece Likely to Get Next Portion of Bailout

Posted June 3rd, 2011 at 6:10 pm (UTC-5)
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International lenders say Greece has made progress toward repairing its finances and is likely to get the next installment of its international bailout next month.

The announcement was made Friday after debt inspectors from the European Union, European Central Bank and International Monetary Fund concluded a nearly month-long review of their $159 billion bailout to Greece.

They approved the Greek government's austerity plan in principle, but said privatization and fiscal reforms must be accelerated. They also suggested that Greece might get additional help, but under strict conditions.

Athens has committed to carry out austerity measures and economic reforms in exchange for the international loan package. But EU and IMF officials said the changes are too slow and have threatened to withdraw the next loan installment unless they see substantial progress.

Earlier Friday, protesters blockaded the Finance Ministry where negotiations took place. About 200 people from a communist-affiliated union hung a five-story-tall banner calling for a general strike to protest the government's newest austerity plans.

In Brussels, the commissioner for economic and monetary affairs, Olli Rehn, issued a statement saying that commitments made by the Greek government are essential for fiscal sustainability in Europe. He called on all political forces in Greece to put aside their political differences and endorse the main objectives and policies of the program.

As Greece has struggled to rein in spending, financial industry monitors have repeatedly reduced the country's credit rating, and interest rates the government faces on the national debt have increasingly grown higher.

The Greek Finance Ministry has said Greece would not be able to meet its obligations from mid-July if it does not get the $18 billion portion of the loan package.