Eurozone finance ministers have agreed to give Greece until 2016 to meet its deficit-reduction targets, an extension of two years. However, the Eurogroup has delayed the release of the latest 31.5 billion euro instalment of bailout funds.
The Eurogroup President Jean-Claude Juncker said there would be a further meeting on November the 20th. “Eurogroup expect that by that time, the necessary elements will be in place for member states to launch the relevant national procedures required for the approval of the next EFSF (European Financial Stability Facility) disbursement, subject to the Troika’s final positive assessment of all prior action by the Greek authorities.” he told a press conference in Brussels.
However, there is disagreement rather than delay, over how to make Greece’s debt sustainable in the longer term. The IMF’s Christine Lagarde dismissed suggestions that the target date should be extended by two years. “There is still work to be done, in the next few days on both financing and debt and from our perspective at the IMF, we believe that the debt sustainability of Greece has to be measured in 2020 and our target is 120 percent.”
Greece must repay five billion euros of its debt by this Friday. Athens is expected to make an urgent bid to raise funds from the financial markets this Tuesday morning.