Council on Foreign Relations
October 4, 2011
Eurozone finance ministers meeting in Luxembourg postponed until November (NYT) a decision on whether to release the next tranche of last year's €110 billion EU-IMF financial rescue package for Greece, even as global markets tumbled. The decision followed a weekend announcement by Greece that it will record a deficit of around 8.5 percent (Guardian) of GDP for this year, significantly above the mandated 7.6 percent target.
Greece has insisted that it will run out of funds by mid-October if it does not receive the €8 billion installment. But European finance ministers indicated on Tuesday that they would move to extract all agreed-upon budgetary measures (DeutscheWelle) from the indebted state, while waiting for a report on its finances by representatives of the European Commission, the European Central Bank, and the IMF, known commonly as the troika.
After three days of talks with the troika, the Greek government agreed on a 2012 draft budget on October 2 that includes a €5 billion package of tax increases and spending cuts (FT). At the same time, Greek Finance Minister Evangelos Venizelos said thirty thousand public-sector workers (NYT) will be cut by the end of 2011.
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