EU Official: Eurozone to Agree on $17 Billion for Greece

Posted June 16th, 2011 at 5:05 pm (UTC-5)
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European Union economic chief Olli Rehn says he is confident eurozone ministers will grant a $17 billion loan payment to Greece to prevent Athens from defaulting on its debt.

Rehn spoke Thursday — another day of political and economic turmoil in Greece.

Two ruling Socialist Party members of parliament quit to protest Prime Minister George Papandreou's handling of the of the economic crisis. Mr. Papandreou is calling on parliament to approve his package of more deep spending cuts, tax increases, and plans to sell off a number of state-owned assets.

Greece promised to carry out economic reforms in exchange for last year's $160 billion bailout from the EU and International Monetary Fund.

Ordinary Greeks have turned out in droves to a series of nationwide protests against the sour economy, outraged that they are being asked to make more sacrifices.

Mr. Papandreou said Thursday he realizes the spending cuts are tough and unfair. But he said Greece cannot run away from its problems and that anger will not save the country from default.

The prime minister also put off until Friday plans to name a new government, followed within days by a vote of confidence in parliament.

EU officials have also been discussing the terms of a possible second bailout for Greece. But Rehn says no decision is expected until next month because of disagreements on how much the private sector should contribute to a new rescue package. French President Nicolas Sarkozy said Thursday EU nations must compromise to protect the euro, whose value has weakened against major currencies because of Greece and other weak economies, including Portugal and Ireland.