Eurozone Ministers to Greece: No Bailout Payment Without Spending Cuts

Posted June 20th, 2011 at 5:10 am (UTC-5)
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Eurozone finance ministers say Greece must pass severe economic reforms before it receives the next $17 billion loan payment from the European Union and the IMF.

The finance ministers failed to sign off on the next installment of the $160 billion bailout package after hours of talks ended early Monday in Luxembourg.

However, the ministers of the 17 eurozone nations welcomed what they called “informal voluntary” roll-overs by Greek bond holders – meaning that those who hold Greek debt would hold off demanding payment.

Meanwhile, finance ministers from the Group of Seven wealthiest nations held emergency telephone talks late Sunday on ways to help Greece avoid even deeper problems.

Facing a confidence vote Tuesday, Greek Prime Minister George Papandreou is appealing to parliament to quickly pass his package of spending cuts and tax hikes. He warns that the country faces bankruptcy and debt default if it does not secure the next installment of the bailout, expected in early July.

Millions of Greek citizens are outraged that they are being asked to make more sacrifices, triggering weeks of protests.

The leader of Greece’s Conservative opposition, Antonis Samaras, reiterated his rejection of Mr. Papandreou’s austerity proposals Sunday and called for early elections.

Athens also is negotiating a second bailout package to keep its economy afloat beyond September. But EU leaders have not been able to agree on the terms of such a loan, including how much of its should be funded by the private sector.