Greece Debt Talks with Creditors End Without Resolution

Posted September 19th, 2011 at 3:45 pm (UTC-5)
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Greece's bid Monday night to convince its international creditors to hand it more financial assistance to avoid a default next month on its bailout loans has ended without resolution — at least for now.

Greek Finance Minister Evangelos Venizelos talked with key officials from the International Monetary Fund, the European Union and the European Central Bank. At one point, Greece said the discussions could last into the early hours of Tuesday. But the talks instead were halted, with another telephone conference set for Tuesday night after technical experts had a chance to continue to examine the country's financial plans.

The Greek finance ministry called the talks “productive and substantive.” The discussions came after the IMF and EU increased pressure on the debt-ridden government to carry out its budget austerity measures if it hopes to receive an $11 billion portion of last year's $159 billion bailout in order to avoid default on its loans next month.

Venizelos promised that the government would speed up its reforms and layoffs of government workers. But he warned that the next few days would be “very difficult” for the country and the 16 other nations that use the euro currency as Greece seeks to solve its financial woes.

The IMF's representative in Greece, Bob Traa, said the Athens government must quickly sell some state-owned operations to private ventures and improve tax collection. He said privatization of the government-owned agencies was behind schedule because Greek lawmakers could not agree on how to carry out the sales, and warned that Greece “will go to a default” if it does not act quickly.

The EU said it is not asking Greece for new austerity measures, just compliance with what it had already agreed to .

The Greek economy is mired in a recession, with a 5.5 percent contraction expected this year, and another 2.5 percent drop next year. But the IMF is projecting a return to growth in 2013.

The outcome of Greece's discussions with its creditors will help determine whether it is eligible to receive the next aid payment.

Prime Minister George Papandreou canceled a planned trip to the United Nations in New York Sunday to chair a Cabinet meeting ahead of Monday's assessment of Greek efforts.

Greece could run out of money in October if it does not get the loan installment, threatening financial havoc throughout the EU and on world markets.

Stocks markets fell Monday in Asia, Europe and the U.S. amid fears of the deepening Greek financial crisis.