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?s ability to raise the money on its own has been cast into doubt after the European Central Bank refused to increase the amount of treasury bills it would accept as collateral from Greek banks seeking low-interest ECB loans. Without the ability to use treasury bills as collateral, Greek banks have little financial incentive to purchase them.But Olli Rehn, the EU?s top economic official, said even if the ECB did not raise the ceiling of treasury bills it would accept, Greek banks had improved their cash position enough that they were expected to purchase the debt anyway, getting over what Mr Rehn termed a ?Greek fiscal cliff?. According to CNN, the Lagarde-Juncker spat was a public manifestation of a fight that has been simmering behind closed doors for months. The IMF has insisted the overhauled bailout plan include a credible debt reduction proposal, which may force eurozone countries to accept losses on bailout loans. But European Commission officials believe the IMF is being overly pessimistic, arguing Greece can grow faster economically and should be given more leeway to meet debt targets. According to senior officials, the IMF believes that without any relief, Greek debt will stand at nearly 150 per cent of gross domestic product by 2020, while the European Commission believes it will be just over 140 per cent. Without agreement on the baseline, officials cannot come up with a debt relief plan, which will involve both eurozone governments and the ECB giving up cash they had originally been owed by Greece. If the target is moved to 2022, eurozone governments will have an easier time formulating a plan, since it likely will only involve cutting interest rates on bailout loans. Standing firm to 2020 may require write downs on those loans, something Germany and other creditor countries have refused to do. 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.Tuesday Greece raised 4.062 billion euros (in an emergency sale of four- and 13-week treasury bills, in order to cover immediate financing needs due to the delay of the next bailout tranche, Xinhua reports. The amount will be used to refinance previous bonds maturing on Nov. 16, as the debt-laden country still awaits the release of the 31.5-billion-euro rescue installment from international lenders which is five months overdue due to June?s general elections in Greece.
Source: http://www.nineoclock.ro/greece-gets-two-more-years-but-bailout-is-delayed/
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