The EU Greece gives ultimatum: more cuts for help

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Luxembourg - euro zone Finance Ministers gave Greece two weeks Monday to approve more spending cuts and tax his ragged finances in order rises in exchange for another EUR 12 billion in emergency loans, piling pressure on Athens, to get.

After two days of crisis talks effectively asked Minister Athens, saying the Greek Government, Parliament and society in General had an ultimatum until July 3 to approve a new austerity package, includes the privatization measures to secure the release of the next tranche of EU/IMF assistance.

Greece is the next tranche risks defaulting on its debts, the fifth edition of 110 billion euro ($ 155 billion) of loans agreed shared with Athens in May 2010, in a timely manner.

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"The approval of the Greek Parliament is absolutely necessary and will get it in time, so we can take a decision on 3 July," Jean-Claude Juncker, the Eurogroup of Finance Ministers said 17 euro zone Chair.

"It's clear that sustainable (Greek) is the debt, but the debts are only sustainable if Greece has met his obligations that agreed with the troika", he told reporters, on the European Union, the International Monetary Fund and the European Central Bank.

Greece appointed new Finance Minister, Evangelos Venizelos, a statement shortly before Juncker said, that he would try to ensure that the program already revised strict may be approved by 28 June.

"Priority is, a clear relationship of trust, to stabilize the situation, a withdrawal of the fifth rate have to develop," Venizelos said. "The political time is compressed much were." "Every day is of extreme importance and therefore we can waste no hour make."

To their ability to deal with problems in the euro area, the Ministers shoring also rubber stamped an agreement, the effective lending capacity of the current bailout Fund to increase the EFSF guarantees EUR 440 billion by increasing.

And they said that creditor status European stability mechanism, which is not preferred permanent crisis fund, which will replace the EFSF of June 2013 might have, if it facilitates loans of Greece, Ireland and Portugal, a change that concerns among private creditors about its structure.

Athens on watch
In Athens masses of anti-austerity, protesters gathered on the square outside Parliament, but it no new arguments were with the police. Power workers began a strike and power outages in parts of the country were expected.

The highly unpopular ban plans to produce the other 6.5 billion euros in fiscal consolidation this year and 28 billion by 2015 and 50 billion euros from the sale of State property debated Greek legislators in Parliament.

On Sunday, Prime Minister George Papandreou called on the nation to accept steps that certainly in the short term will make it more difficult life for most citizens.

"The consequences would one be violent bankruptcy or exit from the euro immediately catastrophically for households, banks and the credibility of the country," said Papandreou at the beginning of debate confidence to his new crisis Cabinet.

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While some financial experts in Greece protests die down and expect to be approved the package Finally, said a Greek newspaper the EU Greece had mistreated on Monday.

Blaming "the stupidity of the Europeans," wrote the newspaper Eleftherotypia in an editorial:

"Today it is threatened too little whore Europe." If the euro 17 users don't understand that to save their business they need to a Federation, the euro will collapse, and with it half of its economy. "

New inspections
Financial leaders from the Group of seven industrialized nations held an emergency of Conference on Sunday night, worried about the possible impact on the global financial markets if Greece were to standard and Canada Finance Ministers she said they discussed all of the other on Monday.

Inspectors the EU and the IMF a further visit to Athens of this week-do, only a Inspektion-said after-to examine, which wants to make the country on the plan, Olli Rehn, the EU Monetary Affairs Commissioner, it changes.

In Athens impose a time limit, he said Juncker already had an extraordinary meeting of Finance Ministers of the eurozone for July 3 If the payment of EUR 12 billion being accepted - if Greece keeps his side of the transaction.

Weakening of the euro against the dollar on the outskirts on Monday and the cost of insuring Greek and Italian debt against default rose, i.e. it mirrors the increasing risk of infection of indebted eurozone Greek problems.

Moody's rating agency said on Friday that it would downgrade Italy Aa2 rating in the next 90 days is about Greek crisis of could derail Italy's lukewarm recovery given.

While it seems likely that Athens finally the next tranche, as well as a further emergency loan program of around 120 billion euros by the end of 2014, the result is preserved only for Greece buy has more time-the possibility of debt restructuring in the longer term or even a part of its debt not gone away.

After their meeting in the early morning hours of Monday Declaration which say one euro-zone Ministers ready, having a second package of loans for Greece, despite the country's misguided debt goals in the first package have been collected.

, Until mid-July sets out more official loans a contribution by private investors, which is expected, includes the second package, and for the first time that you volunteer purchases new Greek bonds such as existing to tires.

Euro-zone officials have told of Reuters new plan expected that Greece in end of 2014 to finance and provide up to EUR 60 billion fresh official loans EUR 30 billion from the private sector and 30 billion euros from privatizations,.

In an attempt to gain the cooperation of the ECB, which would cause each schema, which opposed to rating agencies, to declare Greece in default, the Minister said that the private sector debt rollover to avoid even a limited or "selective" standard.

Copyright 2011 Thomson Reuters.