Friday, November 4, 2011

EU to hold cash until it sees Greek stability

Financial Times
November 4, 2011

Despite the Greek government’s decision to abandon plans for a referendum on its €130bn bail-out, European officials said they would continue to withhold an €8bn payment until Athens committed to the rescue’s strictures.

Herman Van Rompuy, the EU leader who heads the council of all eurozone presidents and prime ministers, said Greece must quickly return to a “climate of political stability”, and pressed both parties to sign off on the programme.

“Greece has to adopt the new plan that was agreed,” Mr Van Rompuy said at a post-summit news conference at the Group of 20 gathering in Cannes. “That is a precondition for any aid to be distributed.”

The cash-strapped Greek government needs to pay more than 700,000 public sector workers and over 2m pensioners at the end of the month. Officials said the critical deadline was in the ­middle of December, when Athens would face bond payments totalling €8bn. The first, a €1.7bn bond, comes due on December 19.

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