A leading figure in the European Central Bank has suggested euro zone countries should agree funding for Greece over the next two years. That would put off a permanent solution until after elections in Germany.
Joerg Asmussen was speaking as euro zone finance ministers prepared for yet another meeting with the International Monetary Fund, an organisation unlikely to welcome any further delay.
The IMF’s Christine Lagarde wants a permanent agreement on Greek debt sooner rather than later to protect the country’s economy from continued damage.
The Greek debt mountain is enormous and growing according to the government — it is more than 175% of the total amount the country produces — and the IMF want it down to 120% by 2020.
The Greek government has issued two new laws to make sure budgets are met, and that the proceeds from the sale of public assets are used to pay off debt.
Along with an austerity package earlier in the month, a government spokesman said that should be enough for the Eurogroup ministers to release another 30-billion euros in emergency aid.
The IMF has warned euro zone countries that they will inevitably have to kiss goodbye to some of the funds they have lent to Greece – something Germany has said is unacceptable and illegal.
Greece is heading for its sixth year of recession – and the pain felt in Greek households has made street protests commonplace.