Bailout agony extended

Greece will have to wait until Monday, when eurozone finance ministers meet, to discover if it will receive the final approval for a new bailout, although this may involve a permanent presence for the troika in Athens and the opening of an escrow account for the loans to be paid into.

The Eurogroup held a teleconference Wednesday to assess whether Greece had met all the preconditions for finance ministers to sign off on the deal, to be worth at least 130 billion euros. Eurogroup chief Jean-Claude Juncker said Greece had met the three terms it had been set, including the provision of written commitments from PASOK’s George Papandreou and New Democracy’s Antonis Samaras.

“First, we received the strong assurances provided by the leaders of the two coalition parties in Greece’s government,” he said. “Second, the troika finalized and presented its analysis on the sustainability of Greece’s public debt.

“Third, further technical work between Greece and the troika has led to the identification of the required additional consolidation measures of 325 million euros.”

In his statement, Juncker also hinted at the troika maintaining a permanent presence in Athens to “strengthen the surveillance of the program,” as well as the creation of an escrow account so priority would be given to debt servicing. Under this scheme, Greece would only receive any money to cover public spending if all debts had been paid.

Earlier in the day, Samaras had produced a clear pledge to the reform program to ease concerns within the eurozone about the conservative leader’s commitment. “If New Democracy wins the next election in Greece, we will remain committed to the program’s objectives, targets and key policies,” he said in his letter. He left the option of “policy modifications” open in order to place more emphasis on recovery.

Despite the commitments from Papandreou and Samaras, there were reports last night that Germany, the Netherlands and Finland had raised the issue of obtaining pledges from Greece’s smaller parties as well. There is concern within the eurozone that should snap elections be held in April, it may result in a coalition government that includes parties that are opposed to the terms of the bailout.

The successive demands from the eurozone prompted Finance Minister Evangelos Venizelos to suggest that some “powers in Europe” want to push Greece out of the single currency.

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