Michael Noonan says issues remain over release of €31bn in Greek bailout funds

Tuesday 20 November 2012 22.08
Greek government passed an austerity package worth €13.5bn last week
Greek government passed an austerity package worth €13.5bn last week

Finance Minister Michael Noonan has said there were still substantial issues that had to be resolved if eurozone finance ministers were to release €31bn in urgently needed bailout funds for Greece.

Arriving for an emergency meeting of eurozone finance ministers in Brussels, Mr Noonan said the main gap was that if Greece were given an additional two years to meet its deficit targets it would open up a "funding gap."

"The debate is how that would be filled," he said.

Mr Noonan said he expected the meeting to be a long one, and that there was no certainty that a deal would be reached.

"Everybody wants to see the Greek situation to be resolved, what's at issue is the means of doing so," he told reporters.

He said the uncertainty over the Greek situation was not having any negative effect on Ireland's position as regarded the international markets.

"Not only is the Irish government in a position to raise money, but the ESB and Bank of Ireland have been raising money and others will follow suit."

Earlier, Finland's Finance Minister Jutta Urpilainen said she was unsure if the next loan tranche would be approved.

She said Finland was ready to give Greece more time to reach its financing programme targets but a restructuring of its debt was out of the question.

Having narrowly passed an austerity package worth €13.5bn last week, the Greek government had expected eurozone finance ministers to release the funds last week.

However, there was a bitter and public disagreement between the eurozone and the International Monetary Fund over long-term prospects for Greece's debt.

The IMF's precondition for agreeing to the second bailout was that the country's debt level would stand at 120% of its Gross Domestic Product by 2020.

Most analysts say that with relentless recession that goal is off target.

Eurozone finance ministers said it should be stretched to 2022, but the IMF disagreed.

However, in a sign that a deal may be reachable, Greece last night issued decrees to ensure budget targets were enforceable and that funds raised through privatisation would be held in a so-called "escrow account" to be used to pay off debt.

Agreement near on EU budget - Gilmore

Tánaiste Eamon Gilmore said the President of the European Council hopes to have agreement on an EU budget for the next seven years by the weekend.

Speaking in Brussels, Mr Gilmore said the allocation of the budget between now and 2020 is hugely important to Europe and Ireland.

Mr Gilmore said a meeting on Thursday and Friday and a new set of budget proposals will be presented with a view to getting agreement.

He said the discussions are not aimed at satisfying the interests of any particular country, and his particular interest is in ensuring that the budget satisfies Ireland's needs.

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