Euro zone finance ministers have delayed their decision on a vital 12 billion euro loan to Greece until the cash-strapped country introduces yet more austerity measures.
Prime Minister George Papandreou faces a confidence vote on Tuesday and the Greek parliament is expected to vote on a series of reforms and austerity measures on June 28.
To avoid default, Greece requires the next 12 billion euro slice of EU/IMF bailout by mid-July. Michael Noonan, the Irish finance minister, believes that is still possible. He said “the agreements that were reached have to be ratified by the Greek parliament. So its a normal process, but there shouldn’t be any undue delay, so I would like to see this resolved early in July.”
There are now serious practical concerns about whether Greece can take any more austerity. The country has seen wages slashed, pensions cut and is gripped by protest, anger and fear.
Margherita Sforza is in Luxembourg for euronews. she told us:
“The pressure is well and truly on the Greek government to prevent contagion across the euro zone. The impression is growing that there is no plan B, alternative moves may be necessary in case the Greek government fails to meet its financial commitments to Europe.”