Eurozone finance ministers to discuss Greek rescue
Eurozone finance ministers are due to meet to decide whether Greece has done enough to merit a huge bailout loan.Athens needs the 130bn euros (%u00a3110bn; $170bn) in order to avoid bankruptcy in mid-March, when a huge repayment on its governmental debt must be made.On Sunday Greek PM Lucas Papademos went to Brussels to try to clinch the deal.US Treasury Secretary Timothy Geithner said the US was encouraging the IMF to support the bailout, but it is not clear how much the IMF will contribute.The rescue plan would also write off 100bn euros of debt, with private lenders accepting a 70% reduction in what Greece owes them.Eurozone doubtsFive straight years of recession have left Greece with a debt that is more than 160% of its Gross Domestic Product (GDP).Continue reading the main storyAnalysisimage of Gavin Hewitt Gavin Hewitt BBC Europe editor, BrusselsFor two years Greece has been at the epicentre of the eurozone crisis.Some of the eurozone ministers meeting in Brussels are expressing confidence they’ll agree on a second massive bailout for Greece – and so stave off bankruptcy.But optimism has been misplaced before. The eurozone has yet to agree on how to keep the pressure on Greece to ensure it lives up to its promises.And there are doubts that even with the bailout Greece will reach the target of reducing its debt to a sustainable level.More funds may still have to be found. It’s also not clear how much money the IMF will put in. And some ministers remain sceptical that Greece can be trusted.Eurozone leaders and the IMF said in October that Greece’s debt should be reduced to the more sustainable level of 120% of GDP by 2020.Successive rounds of austerity measures, demanded by the EU, the IMF and the European Central Bank – Greece’s international creditors, have failed to restore growth and have provoked clashes between protesters and police.Measures passed by parliament last week set out 3.3bn euros worth of cuts to salaries and pensions, and health and defence spending.Several thousand people protested in Athens on Sunday against further cuts agreed to by Mr Papademos’ cabinet on Saturday – but the numbers were far reduced from the tens of thousands who protested last week.Some eurozone finance ministers doubt Greece’s commitment to its spending pledges and want strong mechanisms to ensure its debts are paid.It is not yet clear how the eurozone intends to keep the pressure on Greece to ensure it fulfils its commitments, says the BBC’s Europe editor, Gavin Hewitt.And, he adds, there are doubts that even with the bailout Greece will be able to reduce its debt to a sustainable level.Funds from elsewhere may need to be found.On Wednesday, the eurozone finance ministers said Greece had made substantial progress, but demanded more detail, including a full timeline for implementing the measures.Jean-Claude Juncker, head of the so-called Eurogroup, said more work was needed to strengthen oversight of how Greece would implement its austerity plans.This would be the second bailout for Greece. A first rescue fund of 110bn euros in 2010 was not enough to avert the crisis.
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