Tags: EU | Greece | Financial | Crisis

Greece Recommended for Next Batch of Bailout Funds

Friday, 03 Jun 2011 12:04 PM

Greece is poised to receive the next installment of its bailout facility next month, debt inspectors said Friday after a near monthlong inspection of the country's public finances.

It also looks Greece's partners in the eurozone could be stumping up additional new money beyond the current 110 billion euro ($160.93 billion) package to help the debt-ridden country meet its massive debt obligations.

"I expect the eurogroup to agree on additional financing to be provided to Greece, under of course strict conditionality," Jean-Claude Juncker, the head of the 17 eurozone finance ministers, said in Luxembourg following a meeting with Greek Prime Minister George Papandreou.

Juncker also hinted that the private sector will be asked to help out.

"This conditionality will include private sector involvement on a voluntary basis and this private sector involvement will have to be negotiated with private creditors," Juncker said without elaborating.

Eurozone states have been discussing whether to ask private creditors to give Greece more time to repay its bonds or buy new bonds as old ones expire.

Juncker was speaking after the European Union, European Central Bank and the International Monetary Fund, collectively known as the troika, gave Greece more breathing room as it tries to service its debts. Without the 12 billion euros due from the bailout facility due this summer, Greece was facing default.

The next installment of the loans it first began receiving in May last year is expected to be made available in early July, the troika said. It later slightly amended the wording to underline the funds would be most likely available in early July following approval from the IMF's board and the eurogroup.

The three also said they expected the Greek economy to stabilize at the turn of the year. That's important because the debt burden as a proportion of the country's debt continues to rise if the economy is shrinking as it has been for much of the last three years.

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