Brussels: Eurozone finance ministers will seek agreement on Monday on unlocking imperative loan aid for Greece, after a warning from Athens that it will miss budget deficit targets sent markets reducing in Asian trade.
The 17 countries that share the debt-challenged euro currency will meet in Luxembourg, seeking evidence on whether Greece should obtain an 8-billion-euro tranche of loans, blocked by the IMF for the past month.
The Athens government did nothing to improve the mood of investors when it announced Sunday that the budget deficit should drop to 8.5 per cent of GDP in 2011 from 10.5 per cent previous year, short of an earlier 7.4-per cent target.
In 2012, Greece anticipates a further reduction of public deficits, setting the target to 6.8 per cent of gross domestic product, rather than the 6.5 per cent initially forecast.
The deficit target is linked to a bailout package that Greece requests to avoid running out of cash. The government says it needs the loans to pay salary and other bills this month.
Asian markets were the 1st open to respond to the news which heightened fears over the outlook of a devastating debt default and reinforced concerns over eurozone policymakers’ talent to surmount the debt crisis.
US Treasury Secretary Timothy Geithner has already recommended German Finance Minister Wolfgang Schaeuble to put more of Berlin’s financial heft at the eurozone’s disposal if things get worse. But Schaeuble said at the weekend that the 211-billion-euro limit set for its exposure will not rise.
The EU-IMF auditors returned to Athens on Thursday, 4 weeks after they suddenly left disappointed at Greece’s lack of progress in executed promised structural reform measures.