Eurozone fails to agree on Greek bailout funds

Wednesday 21 November 2012 20.23
Michael Noonan talks with ECB president Mario Draghi ahead of the meeting
Michael Noonan talks with ECB president Mario Draghi ahead of the meeting

International lenders have failed for the second week to reach a deal to release emergency aid for Greece.

Eurozone leaders will try again next Monday, but Germany signalled that significant divisions remain.

Eurozone finance ministers, the International Monetary Fund and the European Central Bank were unable to agree in 12 hours of overnight talks.

The disagreement centred on how to make Greece's debt sustainable.

Lenders want a solution before paying the next loan tranche which is urgently needed to keep Greece afloat.

Several European officials played down the delay, saying the disagreements were technical and a deal would be reached when they meet again on 26 November.

European governments want to give Greece an extra two years, until 2022, to cut its debt to a sustainable level of 120% of GDP but the IMF does not agree.

The Europeans, led by Germany, are refusing to write off any loans.

Both options would make it easier for Greece to meet the targets in the bailout programme.

Greece needs the next €31bn aid tranche to keep servicing its debt and avoid bankruptcy.

Its next major repayment is in mid-December.

Athens says it has carried out the tough reforms required in the bailout programme but needs more time to reach fiscal targets agreed with lenders because its economy keeps shrinking.

Greece is increasingly frustrated about the repeated delays in releasing the aid and says it has done what is necessary.

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