Eurozone puts back decision on Greek loans

Luxembourg: Eurozone partners have put back a decision on whether to resume bailout funding for Greece, but categorically ruled out any chance of default.

Eurogroup chairman Jean-Claude Juncker said currency partners had asked the Greek government to take moves to ensure further savings in 2013 and 2014.

That would then lead to a “definite and final decision in the course of October,” because Greece said it does not need eight billion euros in blocked loans until November.

Juncker said he “firmly denied” any suggestion that Greece would be allowed to default on its debts, and revealed that an agreement was reached among the 17 eurozone states to reduce the return on loans made by states demanding collateral first.

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He called for “rapid legislation and entry into force” of a new 2012 budget and the extra measures sought for subsequent years, with the Greek parliament set to vote on the changes at the start of November.

The other main worry, Slovakia dragging its heels in ratifying changes to the eurozone’s rescue fund, was also removed after talks with the Slovakian prime minister, Juncker said.

Asked if he was confident Bratislava would not torpedo the vote, with only Malta and the Netherlands also still to rubber stamp a July deal, Juncker gave an emphatic “yes.”

The European Financial Stability Facility, meanwhile, would discuss further ideas for how to ramp up the effectiveness of the 440-billion-euro fund, after talks about possible “leveraging,” to multiply its firepower.

PTI