Bloomberg News

Greece’s Stournaras Claims Victory at Euro-Area Finance Meeting

November 12, 2012

Greek Finance Minister Yannis Stournaras claimed victory at a meeting with his euro-area counterparts, saying Greece is on course to gain two extra years for reaching budget-austerity targets and to unlock aid payments.

Speaking after the gathering of euro-area finance chiefs and International Monetary Fund Managing Director Christine Lagarde, Stournaras said they will give Greece until 2016 to meet goals for narrowing the spending gap. He also said the country will receive a 31.3 billion-euro ($39.8 billion) disbursement of emergency funds in late November or early December.

“It’s a done deal,” Stournaras told reporters today in Brussels after the meeting. “It’s very important.”

The gathering of the 17-nation euro’s finance chiefs and Lagarde addressed Greece’s budget deficit, debt sustainability and request for two additional years to meet fiscal targets. The euro-area ministers plan to meet again on Nov. 20 to decide whether to release emergency aid for the country.

Greece, facing a sixth year of recession in 2013, has been negotiating with the euro area and the IMF over the steps needed to qualify for the release of loan instalments frozen since June. At stake is whether the Greek government of Prime Minister Antonis Samaras can pay its bills, recapitalize domestic banks and stay in the euro.

Over the past week, the Greek parliament has approved extra austerity measures demanded by the country’s international creditors. The measures include a 2013 budget to shrink the spending gap further.

Greece narrowed its budget deficit from more than 15 percent of gross domestic product in 2009 -- five times the European Union limit -- to 9.4 percent in 2011. The spending gap is due to shrink to below 7 percent of GDP this year and to almost 5 percent in 2013.

To contact the editor responsible for this story: Jonathan Stearns at jstearns2@bloomberg.net


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