European finance ministers failed in more than eleven hours of talks in Brussels yesterday to reach an agreement on how to ensure the sustainability of Greek debt and delayed a decision on the pending tranche.
European finance ministers and the International Monetary Fund (IMF) failed to agree on the needed measures to reduce Greece’s debt load and set it back on the path to fiscal health and settled for praising Greece for the economic overhaul.
Talks that started late Tuesday night extended into early hours on Wednesday and a deal was not reached yet again, delaying the release of vital aid needed to keep Greece afloat.
Chairman of the Eurogroup Jean-Claude Juncker said that progress was made on a package of measure to reduce Greece’s public debt but more technical work was needed.
It looks like the praise received by the Greek government on the adopted reforms and austerity measures was not enough for Germany or the International Monetary Fund to create a package of new financial aid for Greece, especially as the deficit is expected to reach 190% of the GDP by 2014.
German Finance Minsiter Wolfgang Schaeuble told reports that there are “a series of options on the table” on how to close the financing gap and after discussing the issue “intensively” it remains “complicated and we couldn’t come to a final agreement”.
Germany leads the refusal of contributing fresh money to Greece or even offering debt relief, the matter that is supported by the IMF. Euro governments face their people and debt forgiveness for Greece is a matter of political tension for them at home! The conditions for continued support from national government is still based on the notion that Greece will repay the full 240 billion euros of aid receive in two bailout packages since 2010.
The deadlock weighed on the euro once again and hammered the sentiment as the decision was delayed again till the next finance ministers meeting on November 26.