Greece, Portugal top eurozone talks

BRUSSELS: Finance ministers from the 17-nation eurozone are meeting today to decide if Greece has done enough to get a new slice of loans, and to deal with the political crisis in Portugal, which has raised fears of fresh pressure on the single currency bloc.

The ministers will gather in Brussels for their last meeting before the summer break. International Monetary Fund (IMF) chief Christine Lagarde is also expected to attend.

Top on the agenda is a progress report drawn up by Greece’s so-called troika of international creditors — the European Union, the European Central Bank (ECB) and the IMF — which will detail if Athens is indeed undertaking reforms pledged in exchange for rescue funds.

A positive report would lead to the release of the next tranche of aid worth €8.1 billion (RM33.1 billion) to Greece, including €6.3 billion which are to be put up by the Europeans.

The funds are necessary as Greece needs to redeem bonds worth €6.6 billion by mid-August.

Yesterday, Greek officials said they were close to a deal with the three creditors over a new package of reforms required in exchange for the aid, including thousands of job cuts in the public sector.

The marathon talks moved to Brussels from Athens yesterday, and are expected to go on to the last minute before the Eurogroup meeting is due to open.

Greek Finance Minister Yannis Stournaras said he was “optimistic that tomorrow [today] we will have an agreement”, according to the state-run Athens News Agency.

Athens had pledged to axe 4,000 state jobs by the end of the year, as well as redeploy 25,000 civil servants across its vast bureaucracy.

Eurogroup ministers are also due to discuss the situation in another bailed-out country C Portugal, which sunk into a political crisis over the shock resignations of two key ministers this month.

“Portugal respects all of its engagements and has not asked for anything,” said a European diplomat ahead of the meeting.

But European leaders, including Eurogroup chief and Dutch finance minister Jeroen Dijsselbloem, have asked Lisbon to clarify the political situation quickly, fearing that any uncertainty could throw the country off its course to exit the troika’s rescue programme by 2014.

Tomorrow, the finance ministers from all 28 European Union countries are expected to give the final green light to Latvia to join the eurozone.

They would also have to set an exchange rate between the Latvian lats and the euro. — AFP

This article first appeared in The Edge Financial Daily, on July 08, 2013.