Greece Agrees More Cuts To Secure Bailout
Greece has agreed a further 325m euros (£270m) of spending cuts as it tries to secure another massive EU/IMF bailout, finance minister Evangelos Venizelos has said.
But, despite Greece's assurances about this and several other key demands on top of the 3.3bn euro (£2.7bn) package of cuts already agreed, eurozone ministers want to put Athens under even tighter surveillance in return for the 130bn euro (£108bn) bailout.
The finance chiefs of the 17 countries that use the single currency held a conference call amid doubts over whether the new bailout, which comes on top of a 110bn euro (£91bn) rescue granted in May 2010, can ultimately save debt-laden Greece.
The ministers welcomed the news that it had found extra cuts on top of austerity measures already agreed, and also that the leaders of the main Greek political parties will implement promised cuts and reforms even after elections expected for April.
Mr Venizelos said meeting those demands paves the way for a deal to ease its debt burden to be announced on Monday.
Greece needs the funds to avoid bankruptcy when 14.5bn euros (£12bn) of debt repayments are due to be made on March 20.
However, in a sign of the deep distrust that has built up, Jean-Claude Juncker , the prime minister of Luxembourg who also chairs the finance ministers' meetings, said better surveillance mechanisms had to be set up before new aid could be released.
"Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of programme implementation and to ensure that priority is given to debt servicing," Mr Juncker said.
The statement appeared to be a reference to a Franco-German proposal to set up an account, separate from Greece's general budget, that would be dedicated to repaying Greece's massive debt.
It was unclear whether this account would only manage the bailout money or whether government revenue could also be put into it.
Such an account would give the eurozone more control over what Greece does with its money, after the country has repeatedly missed budget, reform and privatisation targets over the past two years.
However, it could constitute an unprecedented interference into the fiscal affairs of a sovereign state in Europe.
Greece's leaders have rejected criticism of their commitment to a tough austerity package despite strong opposition to it among voters.
Meanwhile, the president of Greece has criticised Germany's finance minister for "insulting" his country after he appeared to suggest the Mediterranean nation may go bankrupt.
Speaking in Athens, a visibly angry President Karolos Papoulias slated Wolfgang Schaeuble and also attacked Greece's critics in the Netherlands and Finland.
Mr Papoulias' controversial comments are seen as highly unusual as he does not normally weigh in to daily political debate.
With the European Union's patience with Greek party politicians close to breaking point, Mr Schaeuble has made a series of critical remarks in recent days.
He has likened the country to a bottomless pit and said on Monday that the eurozone was better prepared to overcome a Greek bankruptcy than two years ago.
He also said the eurozone would do everything it could to avoid a Greek bankruptcy, which will happen if Athens fails to secure an EU/IMF bailout before it has to repay its debt next month.
But Mr Papoulias, an 82-year-old veteran of Greece's resistance struggle against the Nazi occupation in World War Two, said: "I cannot accept Mr Schaeuble insulting my country.
"Who is Mr Schaeuble to insult Greece? Who are the Dutch? Who are the Finnish?"
Mr Papoulias pointed out that Europeans had fought together in the past and said they should now work together during Greece's crisis.
"We were always proud to defend not only our freedom, our country, but Europe's freedom too," he said in a speech at the defence ministry.
Resentment of the tough German stand on Greece's failure to meet targets set by the EU and IMF in return for financial aid has become widespread in recent months.
Protesters burned a German flag last week and newspapers have run computer generated pictures of Chancellor Angela Merkel in a Nazi uniform.