News / Europe

Eurozone Finance Chiefs Resume Greek Bailout Talks

From left, European Commissioner for the Economy Olli Rehn, European Central Bank President Mario Draghi, Greek Finance Minister Yannis Stournaras, and other European finance ministers during a meeting of eurogroup finance ministers in Brussels, Nov. 20, 2012
From left, European Commissioner for the Economy Olli Rehn, European Central Bank President Mario Draghi, Greek Finance Minister Yannis Stournaras, and other European finance ministers during a meeting of eurogroup finance ministers in Brussels, Nov. 20, 2012
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VOA News
Eurozone finance chiefs are meeting in Brussels in another effort to decide whether to release more bailout money to debt-ridden Greece.

Greece hopes the finance ministers on Tuesday will approve a $40 billion rescue segment the Athens government says it needs to avoid a default on its financial obligations. The payment is part of Greece's second bailout in two years.

The head of the finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, says he thinks there is a good chance of approval. But other European officials, including Finnish Finance Minister Jutta Urpilainen, remain skeptical about Greece's commitment to financial reforms.

Contentious negotiations over Greek spending plans have lasted for months. Greece imposed a new round of austerity measures to meet the demands of its international lenders, even as workers staged frequent street protests in opposition.

One independent economist, Vagelis Agapitos, said he thinks the bailout money will eventually be released.
                           
"Irrespective of whether an installment is decided [Tuesday] or in a week's time, the fact is that the installment is likely to get paid in December," he said. "It's either going to be early December or mid-December, which effectively settles the immediate financing needs of the Greek government and avoids any Greek default in December."

With the extensive layoffs of government workers, Agapitos said the Greek economy is moving away from an economy based on the public sector to one focused on private businesses.

"Let's not forget, the Greek economy is right now in transition," Agapitos said. "It's transitioning from a domestically driven consumption model based on a very large public sector to an internationally competitive model based on foreign-direct investment as well as the strengthening of the private sector. This will be done through a combination of measures, not only privatization of public entities, but also recapitalizing the banks in order to finance the real economy because liquidity is a major issue for Greek businessmen at the moment, but also through product and labor reforms."

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