Greece 'confident' of fifth aid installment

29th May 2011, Comments 0 comments

Greek Finance Minister George Papaconstantinou said Sunday he was confident about receiving the next aid installment, rejecting a German magazine article that cast doubt over the transfer.

The head of the eurozone finance ministers, Jean-Claude Juncker, warned last week that the International Monetary Fund may block the next 12-billion-euro (17-billion-dollar) instalment, the fifth tranche in a 110-billion-euro loan package agreed for the debt-ridden country.

Der Spiegel reported Sunday that the European Union will follow suit unless Athens does more to fix its public finances.

Economic affairs commissioner Olli Rehn told the magazine: "We Europeans are setting the same conditions as the International Monetary Fund... The situation is very serious."

Papaconstantinou said in a ministry statement that negotiations were continuing and "they will be finalised in the next few days."

He added: "We have every reason to believe that these negotiations will conclude positively for the country... that's to say we will get the fifth installment."

According to Der Spiegel the EU will decide after examining the latest quarterly audit of Greek public finances by experts from the European Central Bank, the EU and the IMF.

The audit will say that Athens is missing all budget promises made last year in return for the bailout, the weekly said, without citing where it got the information.

The allegation "has no basis in reality for the main reason that the report doesn't exist yet... it hasn't even been drafted," said Papaconstantinou.

On Friday, Greek political leaders failed to agree on further austerity measures but Prime Minister George Papandreou went on national television to say his government would "take the necessary measures."

Greece was the first of three members of the 17-nation eurozone to need a multi-billion-euro bailout. Ireland and Portugal have since followed suit and markets fear that Spain might eventually need help too.

© 2011 AFP

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