We are determined as a country, as a government, to be on track with the program, to move forward, to do what is necessary in order to put our country into a fiscally much more viable position. At the same time, we do hope that the European Union will have also the similar will.
Greek prime minister, George Papandreou, will face a vote of confidence tomorrow
5.40pm: Greece's central-government budget deficit widened in the first five months of the year as the country's recession hit tax revenue.
The shortfall increased to €10.3bn from €9.1bn a year earlier. Net revenue decreased 7.1pc to €18.4bn in the first five months, falling short of the €20.5bn target included in the 2011 budget plan. Ordinary spending increased 6.4pc from a year earlier to €27.6bn. The target for spending was €26.6bn.
The ministry blamed the drop on the recession, the absence of road-tax fees collected in January last year and an increase in rebates to people who paid too much tax in 2010.
5.31pm: Some more from this afternoon's debate in the House of Commons on the Greece situation.
Labour's former foreign secretary, Jack Straw, said that the UK's exposure to Greek debt was actually in the region of $13bn (£8bn).
He said the Government needed to recognise there was a "mood change" in Europe, with former europhiles "contemplating the end of the euro as we know it".
What the Government should do, instead of sheltering behind the complacent language, weasel words 'it's not appropriate, we shouldn't speculate', recognise that this eurozone cannot last and it's the responsibility of this British Government to be open with the British people now about the alternative prospects.
If this euro in its current form is going to collapse, is it better not that it happens quickly rather than a slow death?
Mr Hoban said his figures were based on Bank of England data, telling Mr Straw that as a member of the last Government he was committed to taking the UK in to the euro.
5.14pm: Richard Blackden, the Telegraph's US business editor, reports from the other side of the pond:
The timing of this latest crisis isn't all bad news for the US, especially if you're a Republican fighting for spending cuts in Washington DC. An analyst who visited the Republicans' negotiating team in the capital last week said that every time Greece is on the frontpage, they feel it strengthens their hand in their talks with Democrats.
It's an echo of how the Greek crisis helped the Conservatives in the weeks before last year's general election. Republicans and Democrats are currently locked in negotiations aimed at lifting America's legal debt limit by the end of next month. Failure to reach an agreement, would certainly knock Greece off the frontpages.
The crisis has also been rather good for the US government bond market, where ten-year bonds are close to their highest this year and two-year bonds are enjoying their longest rally in 25 years.
5.10pm: German Finance Minister Wolfgang Schaeuble has said that the German guaranteed contribution to the European Financial Stability Facility will rise to €211bn from €123bn.
4.55pm: Having taken a sharp tumble this morning, London's blue-chip stocks have recovered some of their losses. But the FTSE 100 has still finished down 21.55 points to 5693.39.
Ben Critchley, sales trader at IG Index, said:
The elephant in the room is clearly Greece. With the weekend seeing a delay by EU finance ministers in providing the next tranche of aid, this was enough to keep markets subdued. The vote of confidence in the Greek government tomorrow and the EU meeting in Brussels later this week remain factors to watch out for – all have the potential to provide markets with the odd downside surprise. With this hanging over investors, there really is no compelling reason to go loading up on risk in the next couple of days.
4.50pm: A wrap-up of how the Greece situation has unfolded so far today:
- Eurozone finance ministers have given Greece two weeks from Monday to approve stricter austerity measures in return for another €12bn in emergency loans. After two days of meetings, ministers effectively issued Athens an ultimatum, saying the Greek government, parliament and society had until July 3 to approve a new package of spending cuts, tax hikes and privatisation measures in order to receive the next tranche of EU/IMF aid.
- In order to impose a deadline on Athens, Jean-Claude Juncker said he had already scheduled an extraordinary meeting of eurozone finance ministers for July 3, when the disbursement of the €12bn will be approved - if Greece keeps its side of the deal. "It is clear that the [Greek] debt is sustainable, but the debt will only remain sustainable if Greece fulfils all its commitments which it agreed with the troika," said Mr Juncker, who chairs the Eurogroup of 17 finance ministers, referring to the European Union, International Monetary Fund and European Central Bank
- The International Monetary Fund has said that it will have to be sure Greek reforms are on track and will be financed by the euro zone before the lender can pay out its part of the next aid tranche for Athens. "For a successful review of the existing programme with Greece, which means approval of a new disbursement, it requires the IMF's executive board to conclude that the programme is on track and that it is financed," acting IMF chief, John Lipsky, said.
- Finance ministers delivered on year-old pledges to boost the effective lending capacity of a temporary rescue fund to €440bn by increasing each country’s guarantee. Collateral rules had limited the fund to about €250bn. In a departure from earlier plans, they decided that loans to Greece, Ireland and Portugal from the future permanent fund won’t enjoy preferred status over private creditors. That fund, the European Stability Mechanism, will take effect in July 2013.
4.15pm: More from Mark Hoban speaking in the House of Commons. He has said there is no suggestion that Britain will be asked to provide financial support for Greece other than through its contributions to the International Monetary Fund. He said:
The burden is shared between the IMF and euro-area member states and we expect that to continue. The position on this is well understood across the euro area.
Hoban said British banks’ exposure to Greek sovereign debt is “relatively small” at $4bn (£2.5bn) as of the end of the first quarter, much less than the exposure of French and German banks.
4.09pm: Another dispatch from Bruno Waterfield in Luxembourg:
View from the Luxembourg corridor is that the IMF has put a fizzing rocket up the backside of European leaders who meet in Brussels on Thursday.
To recap John Lipsky, the acting IMF chief, warned that EU that dithering over Greece and the broader sovereign crisis “could rapidly spread the tensions to the core of the euro area and result in large global spill overs.”
This is a stark message to vacillating leaders like Angela Merkel and Nicolas Sarkozy, who cannot even agree on private sector involvement in Greece, that their indecision has global consequences if it fuels contagion.
“Our analysis suggests that the crisis would be felt much strongly around the world if it were to affect banks in the core economies of the euro area,” he warned noting that Europe had “deeply intertwined fiscal and financial problems," he said.
“The spill over analysis implies success in managing the crisis will benefit not only the euro area but also the global economy as a whole.”
He also warned EU leaders to end their “unproductive debate” on debt restructuring and said “policies to stop contagion from sovereign debt adjustment or re-profiling are at a premium”.
But Mr Lipsky conspicuously stayed out of taking sides in the debt restructuring debate or commenting on the ECB’s haircut phobia - after all, as another IMF official told me “we do default”.
“Restructuring is frequently a feature of our programmes but of course in the European context the ECB are a very important decision-maker,” he added diplomatically.
3.54pm: Canada has weighed in on the Greek crisis. Jim Flaherty, the country's finance minister, said Canada is pushing its European counterparts to come to a speedy resolution to the Greek debt crisis to avoid contagion. He said:
The key I think, and our message is that, delay is not desirable. It's important to come to a resolution to avoid the danger of contagion arising from the situation in Greece. So there's a sense on our part that it's important that the situation be dealt with as expeditiously as possible.
3.51pm: Mark Hoban, Treasury minister, is speaking in the Commons on Greece. He has indicated that continued instability in the euro zone could hold back the UK's economic recovery. More to come.
Louise Armitstead, Telegraph's chief business correspondent, has written a handy primer asking just how much of the Greek bail-out tab Britain could be forced to pick up.
3.28pm: More from John Lipsky, acting head of the International Monetary Fund.
"For a successful review of the existing programme with Greece, which means approval of a new disbursement, it requires the IMF's executive board to conclude that the programme is on track and that it is financed," he told a news conference.
The Greek parliament is to vote on June 28 on a package of reforms and austerity measures to get Athens back on track after it missed fiscal consolidation targets agreed with the IMF and the euro zone under a €110bn bailout last year.
"On track means that the Greek authorities have agreed on a package of measures that... would put the programme on track," he said.
But he added that the euro zone also has to guarantee that it will continue to finance Greece.
"We will all require assurances that the programme is financed and that involves assurances from our Eurogroup partners that adequate finance is available," Lipsky said.
"That needs to be done before we can move forward and we are hopeful that those conditions will be met with alacrity."
3.13pm: Bruno Waterfield says the IMF has been critical, urging "a more cohesive and cooperative approach is needed to manage the crisis".
John Lipsky, the acting head of the IMF, has also been speaking to reporters. He has said the fund isn't negotiating a second rescue package for Greece. He said the IMF is focused on getting Greece's first bail-out programme on track and that Greece hadn't approached the IMF to ask for additional aid.
3.06pm: After our brief musical interlude, an update on how the euro is faring. It is now up 0.09pc against the dollar at $1.4319. Its rally came as Jean-Claude Juncker said Italy was not in danger amid the euro area’s debt crisis. Juncker also said Greek Prime Minister George Papandreou had assured him the government would do everything to ensure financial aid from the European Union and International Monetary Fund before the Greek parliament resumes debating a motion of confidence in the government.
2.52pm: What does Amy Winehouse have to do with the Greek debt crisis? Not a great deal, it has to be said. But in another blow for the embattled Greeks, the singer has cancelled her appearances at festivals in Turkey and Greece after she was jeered at a show in Serbia, with some critics claiming she appeared drunk. She pulled out of the shows which take place later this week, as she "cannot perform to the best of her ability", her spokesman said. However, the soul-diva clearly has the troubled Greek nation on her mind as she apparently greeted the Serbian crowd with "Hello Athens".
2.42pm: Wall Street is just about managing to hold steady despite all the Greek shenanigans. The Dow Jones Industrial Average is up 4 points to 12010.
2.41pm: Cheering words from the International Monetary Fund. It has warned that Europe's debt crisis has the potential to crush the otherwise positive economic outlook for the region unless policy makers step up efforts to resolve it.
“A broadly sound recovery continues, but the sovereign crisis in the periphery threatens to overwhelm this favorable outlook, and much remains to be done to secure a dynamic and resilient monetary union,” the Washington-based fund said in its concluding statement on euro-area policies today. “Failure to undertake decisive action could rapidly spread the tensions to the core of the euro area and result in large global spillovers.”
The fund said policy makers should scale up Europe’s rescue fund and extend its potential uses “to secondary market purposes and term funding guarantees.” It also said it’s “essential to bring the unproductive debate about debt re- profiling or restructuring to closure quickly.”
Is there something we should know? Ministers huddle up on Monday to thrash-out the finer details of the Greek bail-out.
2.29pm: As if the Greek crisis wasn't enough to keep us occupied, Moody's warned late on Friday that it could cut its rating on Italy's sovereign debt, fuelling contagion fears in the euro zone. The rating agency citied economic growth challenges, risks associated with efforts to reduce debt and the potential for higher borrowing costs.
However, Jean-Claude Juncker said today that he did not believe that Italy is in danger amid the euro area's debt crisis.
2.19pm: Wall Street is set to open lower as the Greek debt saga continues to weigh on markets around the world. In London, the FTSE 100 is off 41 points to 5673.
2.11pm: Bruno Waterfield has sent from Luxembourg the timeline following the Eurogroup press conference:
European Commission and Central bank officials alongside the IMF will hold talks in Athens on Tuesday and Wednesday.
This “troika” will then draw up a “memorandum of understanding” with the Greek government – providing it survives a vote of confidence on Tuesday.
The Greek parliament will vote though an austerity programme based on the “memorandum of understanding” on or around June 28.
Euro group finance ministers will meet Sunday 3 July and will rubber stamp the next instalment, €12bn, the fifth tranche of the first Greek EU-IMF bailout.
Talks will also continue with the aim of drawing up a second bailout for Greece by a July 11 meeting of EU finance ministers.
Private sector involvement, via roll overs of existing Greek debt maturity, will be “absolutely voluntary”.
The bulk of the tab of for a second bailout will come from European taxpayers and will be at least €60bn out of around €120bn will come.
2.06pm: Stephen Lewis at Monument Securities has provided us with a historical parallel for the Greek crisis:
"In medieval times, a blood red moon was regarded as portending calamity. To the credulous, last week’s lunar eclipse will have appeared as an ill omen. The moon is reported to have turned red a week before the fall of Constantinople in 1453 but, since lunar eclipses occur on average twice a year, this can readily be ascribed to coincidence. Perhaps the superstition arose in times as troubled as those through which we are now living, when disasters seemed to occur at intervals of a few months. However that may be, the Greeks are once again in wretched straits, facing as bleak a prospect as when they fell prey to Turkish invaders more than five-hundred years ago."
On the current situation, he writes:
"The euro could yet be saved if the zone’s member-states agreed to a large measure of fiscal integration. But political will is clearly lacking to approve even fairly modest ad hoc transfers of resources, let alone a permanent system for shifting funds from the core to peripheral member-states. Anything euro zone policymakers now say about solving debt problems is apt to be regarded as an exercise in deception, and most likely self-deception, to avoid facing the hard truths stemming from past strategic errors."
1.55pm: Andrew Lilico, an economist with Europe Economics, has blogged on 'The Greek situation is now a battle of two proverbs'. Read his Telegraph blog here
1.43pm: Olli Rehn, European Union Economic and Monetary Affairs Commissioner, has said that euro region finance ministers had converged in the view that a debt rollover styled on the 2009 Vienna Initiative was the best way to involve private investors in a new aid pacakge for Greece.
Any participation by private investors would have to be voluntary, Rehn said after the meeting of euro-region finance chiefs in Luxembourg.
Under the "Vienna Initiative" for central and eastern Europe, international lenders agreed in 2009 to boost credit to the region and the main commercial banks in turn committed to maintain exposure and roll over credit lines.
1.31pm: Apparently, Mark Hoban, financial secretary to the Treasury, is going to answer that urgent question on developments in Greece, which has been tabled by Labour MP Gisela Stuart
1.29pm: And yet more from Jean-Claude Juncker. He has said that holders of Greek bonds must not be pressured to roll over their debt and any participation by private investors in a new aid package for Greece must be voluntary.
1.27pm: More flashes from Reuters on what Jean-Claude Juncker has been saying:
Juncker: Any assistance from ESM will be provided on the basis of strict conditionality
Eurogroup's Juncker: National ratification of ESM to begin soon so treaty can come into effect from end 2012
Eurogroup's Juncker: Have agreed details on the structure of the European Stability Mechanism
1.17pm: Luxembourg Prime Minister, Jean-Claude Juncker, who leads the group of euro-area finance ministers, has said a permanent European Union bailout fund - the European Stability Mechanism - will be fully operational in mid-2013.
1.11pm: Paul Waugh, editor of PoliticsHome.com, tweets that Labour MP, Gisela Stuart, has been granted an Urgent Question on Greece:
Urgent Question granted 3.30 re Greece and UK. Gisela Stuart asking the Q. Dunno who answering for HMT yet.
1.08pm: Louise Armitstead, the Telegraph's chief business correspondent, writes:
Greece’s new finance minister, Evangelos Venizelos, has issued a statement from Luxembourg. It’s a frank - and frankly worrying - admission of the deep political divisions in Greece at the moment, and the struggle the country faces to bridge the divide, fast.
“In contrast to Ireland and Portugal, who appear to have a high degree of internal political consensus, Greece’s national unity has become a perquisite for our partners where it should have been as the Nation’s self-preservation instinct.
“The overriding aim is to develop a clear relationship of trust, to stabilize the situation, to have a disbursement of the fifth instalment. For that to take place, the Medium-Term Fiscal Strategy and the implementation law must be voted [by Parliament] by the end of June.”
He notes the move by the eurozone to demand action from Greece before releasing the €12bn cash injection, or asking private bondholders to share the pain. The statement says:
“All that, constitutes the politically agreed basis for the new financial strategy, for a new programme that is being prepared right now. Therefore, we have plenty to do, on a daily basis. The political time has been compressed a lot; each day is of extreme importance and hence we cannot afford to waste a single hour.
I have already briefed the Prime Minister and tomorrow I will brief the Parliament in detail, as to where the country stands.”
New Greek finance minister Evangelos Venizelos is all smiles on Monday
1.05pm: More on the markets:
"The Greek scenario is still weighing very heavily on the market. There's no resolution and I think the arguments are going to continue. I think the more that it gets prolonged, the weaker the market will get," Martin Dobson, head of trading at Westhouse Securities, said.
In London, banks are weighing on the benchmark index amid concerns over their exposure to euro zone sovereign debt. Royal Bank of Scotland and Lloyds Banking Group are among the sharpest fallers.
Sandy Jadeja, City Index's chief technical analyst, said that if weakness continues through to Tuesday, then it is possible that the FTSE could breach its last major low, hit after the Japan earthquake in mid-March, a signal for much steeper falls in the weeks to come.
As IG_ForexFocus tweets:
A brief rumour about the Greek opposition agreeing to a national unity govt has been proven false, and #EURUSD has fallen back again #forex
12.50pm: Citigoup's chief risk officer has been talking to Reuters about the Greek crisis:
"In Europe, you have to think about whether there will be contagion beyond [Greece]," Brian Leach, told Reuters Insider Television in an interview on the sidelines of the International Economic Forum in St Petersburg.
"I think it will be tough to constrain [the debt crisis] to Greece, [but] other countries have made remarkable progress," he added.
Another significant market risk comes from the Middle East and North Africa (MENA), Leach said.
"The regime changes that are taking place [in MENA] are quite significant. Depending on where those regime changes take place you could imagine a very different world," he said.
Leach sees no further threat from the issues that caused the 2008-09 financial crisis, but instead sees new problems emerging.
"There will always be a new problem on the horizon... So as we all are trying to address whether this is MENA, whether it is the sovereign debt crisis in Europe, whether it is the domestic U.S. debt crisis (...), each of us has to adjust our books to adjust to the new horizons. I think the old ones have been addressed," he said.
12.41pm: Bruno Waterfield reports from a converted supermarket warehouse in Luxembourg...
Nine bedraggled Spaniards protesting at austerity measures outside the Luxembourg meeting on last night had disappeared on a grey and wet Monday morning.
There is no such luck for the hundreds of journalists working packed into an overspill area next to the conference centre where finance ministers are meeting.
The press room - set up in a converted supermarket warehouse as a “temporary facility” for the last eight years – is overcrowded as journalists jostle for desks to cover another EU meeting billed as “make or break” for the euro.
The crush of reporters is not made any better by the fact that EU foreign ministers are meeting in the same building.
While George Osborne and William Hague might bump into each other in the corridors a hectic schedule means that that they are unlikely to exchange notes over a bad coffee in Britain’s second floor delegation room – another Luxembourg prefab.
The euro group is just about to brief but a Treasury has official has just warned the Britpack that the Chancellor is “very unlikely” to do a press conference.
12.33pm: Adam Posen, a Bank of England policy maker, has said the euro has been a success "as a monetary unit" and it will get through the crisis in the currency region.
“The euro has been a success as a monetary unit and as a monetary union, but people expected too much from it and it was never going to take the global role that some fantasized for it,” Posen said at a conference in Madrid today.
“The euro will get through it,” he said, referring to the region’s debt crisis.
“We’re looking at a world where the dollar will be declining in relative importance and where, God willing, the renminbi will be an important, more internationally traded, currency,” he said.
Chancellor George Osborne with French finance minister, Christine Lagarde (L) and Jean Claude-Trichet, European Central Bank President (R)
12.26pm: Another dispatch from Bruno Waterfield in Luxembourg:
George Osborne whisked past the huddle of reporters standing in the rain on his way into the EU finance ministers without saying a word.
No one likes Luxembourg - and the Chancellor, with little patience for the EU's bureaucratic eccentricities, is no exception.
The meeting is being in a grim conference centre that has been the Grand Duchy's “temporary” home for EU ministerial councils for over eight years while another building is refurbished.
Mr Osborne is holding talks on a new bailout for Greece and “economic governance” in "Salle C", a conference room with ceiling tiles, strip lights and porta-cabins for interpreters.
“Imagine Eurovision, a sterile neon light room, the tacky prefab booths and wobbly TV studios, take away any glamour or charm and add the annoyance of having to come all the way to Luxembourg and you'll get the idea,” said one of his aides.
Under the EU’s bizarre treaties, gatherings of European ministers must be held in Luxembourg three months a year, in April, June and October.
The venue is deeply unpopular with ministers and journalists who must travel hundreds of miles for the privilege of maintaining prestige and the flow of EU funds into the Grand Duchy, an entity that most of its German, Belgian and French neighbours regard as more of a tax dodge than a real country.
12.16pm: A team of European Union and Intermational Monetary Fund officials is set to visit Greece this week to discuss changes to the country's mid-term austerity plan, according to a spokesman for the Greek Government.
"We are going to discuss, at a technical level, corrective actions or adjustments that are taking place at parliament," he said.
12.13pm: Downing Street has said that Britain has not been asked to take part in any new European Union bail-out of Greece.
Prime Minister David Cameron's official spokesman told reporters:
"There is no proposal on the table which would involve us. The arrangements in place for Greece are arrangements that involved eurozone countries, and we weren't involved in those arrangements."
Asked if any specific request for help was directed to the UK, the spokesman replied: "No there hasn't."
Mr Cameron will discuss the Athens situation with European Commission president Jose Manuel Barroso at a meeting at 10 Downing Street this afternoon but is not expected to make any offer of help, the Press Association reports.
12.07am: David Buik of BGC Partners is unimpressed by this morning's market activity: "You would have had more fun ‘pulling teeth’ this morning than trying to trade this market!"
"The FTSE has fallen 9pc since its high on 20 February and 4pc since the beginning of the year. Where does the respite come from? Well it comes unequivocally in the hands of the EU/ECB/IMF. The moment they all agree on a sensible solution for this Greek tragedy, markets will continue to drift in to the abyss," he added.
12.05am: Ruth Lea, economic adviser to the Arbuthnot Banking Group, has been considering Britain's potential contribution to another Greek bail-out and she reckons it could amount to £1.2bn.
The EU and IMF have effectively agreed to release a €12bn tranche to Greece by the end of June/beginning of July if Greece passes a new austerity programme. Discussions are progressing for a second resue package - also conditional on a new austerity plan - which could be for around €120bn. This could comprise a private sector contribution, an EU loan, an IMF loan and asset sales through Greece's privatisation programme.
She points out that the UK, even though it's not a member of the Eurozone, has contributed to all three rescue packages so far - by nearly £12bn. Britain has contributed through the EU's European Financial Stabilisation Mechanism, bilaterally to Ireland and as a shareholder of the IMF. The contribution to Greece's second package could be around £1.2bn via the IMF.
Ms Lea said: “The EU and the IMF, fearing market contagion if Greece defaulted, have decided to bail Greece out again. Giving the timing this was probably the right thing to do. But it is only ‘kicking the can down the road’. It is not solving Greece’s problems. And it is not solving the problems of the inherently dysfunctional Eurozone.”
11.51am: Bruno Waterfield, the Telegraph's man on the ground in Luxembourg, reports that Chancellor George Osborne, has arrived for the meeting.
Bruno writes:
The Chancellor's main priority is to keep Britain from being drawn into a new Greek bailout. "This is the main thing on the political side," says a British official.
Britain's liability in what remains of the European Financial Stabilisation Mechanism (EFSM) after Irish and Portuguese bailouts is €5.5billion out of €37.5bn.
Some countries are eying the money - loans that use the EU budget as collateral - as a key compenent of a second €120bn Greek bailout
So far the negotiations "have not reached that level of detail" on whether a new Greek rescue will be additional bi-lateral, euro area government to government loans or the EU's more formal funds.
Germany has suggested that if the €440bn European Financial Stabilisation Facility (euro zone only) is used then for legal reasons the EU-wide EFSM must also be triggered, hitting Britain.
Under the EFSM, agreed by Alistair Darling in the last week of the Labour government, Britain does not have a veto.
"If it is pushed to a vote, we would be very annoyed and they're not likely to want that," said an official.
European Central Bank president, Jean-Claude Trichet, at today's meeting of euro zone finance ministers.
11.40am: Jean-Claude Trichet, European Central Bank president, looks fairly deflated as he decants folders from his euro zone goodie bag (see above) at today's meeting of finance ministers. Who can blame him - the papers must make for grim reading.
11.35am: Yields have taken a leap this morning. The yield on 10-year Greek government bonds jumped 30 basis points to 17.827pc, not far from a euro lifetime high of 18.90pc hit on Friday.
11.32am: The euro has also come under pressure this morning, depreciating 0.1pc agains the yen, dropping for the fourth day, the longest run of declines in six weeks. It slid 0.7pc versus the Swiss franc.
11.22am: It has not been a good morning so far for the markets. The FTSE 100 is off around 40 points to 5675. France's CAC 40 is down 40 points as well at 3782. Germany's DAX has shed 70 points to 7093.
But as David Jones, chief market strategist at IG Index, tweets:
This time last year, #FTSE was down around 6%YRD - it is currently down around 4% YTD. So there's still some hope for the l/term bulls.
11.14am: As if a debt crisis wasn't enough, Greece is apparently facing power outages too as employees at the main power utility begin 48-hour rolling strikes to protest the company's privatisation, which is part of austerity plans needed to avoid a national debt default.
The sell-off of state assets in the power company - known by its acronym DEH - is a major step in a €50bn privatisation drive that must be completed by 2015.
11.09am: As Europe races to save Greece from default, finance chiefs have stressed that further aid hinges on Greek prime minister, George Papandreou, delivering budget cuts in the face of domestic opposition.
“The Greeks have to bring to Parliament their austerity measures and their privatization package and they have to implement those measures,” Luxembourg Finance Minister Luc Frieden told Bloomberg Television as a euro crisis meeting in Luxembourg went into a second day. “Only if those conditions are fulfilled, we can pay out the next tranche and at the same time look for a possible second program to support Greece.”
Germany, which as Europe’s largest economy is the biggest guarantor of the aid packages to Greece, Ireland and Portugal, looked for evidence that Greece’s leaders are united behind an ambitious economic overhaul.
“If the Greeks can’t or don’t want to make the necessary decisions, then we can’t move forward on this track,” German Finance Minister Wolfgang Schaeuble told German radio. “Greece must first fulfill the conditions, then we can approve a new program so that payment of the tranche will be possible.”
Rachel Cooperhere. Welcome to our live coverage of the second day of talks in Luxembourg, as eurozone finance ministers try to agree terms over a second Greek bail-out.
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