Bloomberg News

EU Unlikely to Reach Greek Loan Pact Next Week: Official

November 05, 2012

A Nov. 12 meeting of finance ministers from the euro region may fail to deliver the broad agreement necessary to unfreeze Greece’s bailout, a European official from the Group of 20 nations said.

The meeting, which Luxembourg Prime Minister Jean-Claude Juncker said last week would seek a conclusion to the talks, may just be a step in the process, according to the official, who spoke on condition of anonymity because the negotiations are not public. The official still expects a decision later this month.

Greece, which has received 240 billion euros ($307 billion) in aid pledges from the European Union and the International Monetary Fund since 2010, is under pressure to make more efforts to rein in the budget deficit and deregulate the economy. That alone won’t be enough to unblock payments as a combination of Greek political indecision and economic weakness has jeopardized the country’s efforts to meet a debt target of 120 percent of gross domestic product by 2020.

The official said a package deal has to include both prior actions by the Greek government on fiscal and economic measures and an agreement from creditors on filling the country’s financing gap and making its debt sustainable. A list of options is being reviewed, according to the official.

Separately, the official said that Spain outlined all the measures that it is taking to strengthen its economy and its banking sector yesterday to the finance officials attending of a G-20 meeting in Mexico City.

To contact the reporter on this story: Sandrine Rastello in Mexico City at srastello@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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