Greece bailout: Eurozone ministers set new conditions

Jean-Claude Juncker

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Juncker: “We do not have all the necessary elements on the table to take decisions”

The chairman of a meeting of Eurozone finance ministers says fresh conditions will be attached to a 130bn euro ($170bn; £110bn) bailout for Greece.

Jean-Claude Juncker said the Greek parliament would now have to pass a package of cuts and reforms on Sunday.

In addition, Greek politicians will have to find an extra 325 million euros ($432m; £273m) in savings for 2012.

Greek unions had already called a 48-hour strike, beginning on Friday, in opposition to the measures.

Mr Juncker, the prime minister of Luxembourg, also said Greek political leaders would have to give “strong political assurances” that they will continue to implement reforms after a general election due in April.

“Despite the important progress achieved over the last days, we did not yet have all necessary elements on the table to take decisions today,” he said, referring to a plan agreed by Greece’s fragile ruling coalition after days of talks.

“All these measures are important to ensure a smooth implementation of the programme also after the upcoming general elections.

Protesters march during a rally against austerity measures in Athens on 9 February The Greek government’s latest austerity proposals have already prompted protests by unions

“These three elements, those I mentioned, need to be in place before we can take decisions,” Mr Juncker added.

He further welcomed “assurances provided by the Greek government that all the necessary elements will be put in place in the coming days,” Reuters reports.

The conditions would need to be fulfilled before Eurozone finance ministers reconvene on Wednesday, he said.

Toughening mood

Eurozone countries were also “seriously considering” creating a new, separate account for Greece, which would block a portion of state revenues to guarantee the repayment of bailout loans, EU economic affairs commissioner Olli Rehn said.

The Franco-German proposal is “one possibility for reinforcing surveillance and effectively implementing the programme,” he said.

The BBC’s Chris Morris in Brussels says that given the worsening state of the Greek economy, there is serious concern among European ministers that the overall plan for Greece – involving the new bailout as well as an agreement for private banks to write off a substantial chunk of Greek debt – still doesn’t do enough to put the country on a sustainable economic path.

Greece is trying to negotiate the bailout from the EU and International Monetary Fund (IMF).

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What has become clear at this meeting is the distinct lack of trust among Eurozone ministers that Greece can live up to the promises it makes. They looked into the details of the plans that Greek political leaders had reluctantly signed up to and decided that not enough had been done.

Mr Juncker suggested that patience with Greece is running thin, after a series of difficulties in implementing the terms of the first bail-out given to Athens. The European Union, and the European Commission in particular, will now be trying to monitor Greece much more robustly, sending officials to help speed up progress on issues such as tax evasion and privatisation on which they feel previous promises by the Greeks have not been kept.

The pattern established over the past 18 months or so seems to be reasserting itself. On one side, there is political opposition in Greece to tough austerity measures, and on the other, pressure from voters in countries which are paying money into bailout funds to ensure good money is not being thrown after bad.

It is the second such bailout, and lenders have insisted on more austerity measures in return for the loan.

The mood among Eurozone countries appears to be toughening on Greece, our correspondent says.

While the official view is still that Greece must be saved, he says there is more and more talk on the margins that a Greek default would not be a disaster.

‘Painful measures’

The plan agreed by the Greek government earlier this week includes 15,000 public-sector job cuts, liberalisation of labour laws, lowering the minimum wage by 22% and negotiating a debt write-off with banks.

But a key demand of the EU, IMF and European Central Bank was reform of the pension system, an issue that proved to be a stumbling block.

Prime Minister Lucas Papademos tried to convince his coalition partners to overhaul pensions and save 300m euros a year.

Talks broke up without an agreement, but officials later announced that a compromise had been reached. It was not clear how the 300m euro saving would be made.

The government needs the backing of the eurozone ministers and the approval of the Greek parliament before the deal can be finalised.

Greek Finance Minister Evangelos Venizelos, of the left-wing Pasok party, launched an attack on his conservative rival Antonis Samaras after attending the finance ministers’ meeting in Brussels.

Mr Venizelos said his European counterparts “took into consideration that [Mr] Samaras has still not signed” a letter committing to spending cuts and reforms.

Luxembourg's Prime Minister and Eurogroup chairman, Jean-Claude Juncker, talks with Greece's Finance Minister Evangelos Venizelos Mr Juncker (left) and Greek Finance Minister Evangelos Venizelos discussed the bailout

“The (conservative) party must decide – if they want to stay in the eurozone, they have to say so clearly,” Mr Venizelos said, AFP reports.

Greece is already feeling the effects of an earlier round of austerity, put in place as part of a deal to release funds from a previous bailout.

Those cuts triggered widespread unrest and violent protests.

Greece is deep in recession with unemployment rising above 20%.

Unions have already said they will go out on strike over the latest austerity plans, condemning them as “painful measures” that would create misery.

Meanwhile, US President Barack Obama has reaffirmed America’s willingness to help stabilise the eurozone.

In a meeting with Italian Prime Minister Mario Monti, he also urged European countries to promote a strategy of growth.

Greece is the Word… And here’s why

Greece attracts well over 19 million visitors a year, contributing to 15% of the nation’s economy, according to figures for 2011. Recent research from Post Office Travel Money reveals that Greece has followed the cost-cutting example set by Spain and Portugal. Bars and restaurants in Corfu for example have cut prices by 10%, helping Greece edge closer to the top three value destinations so British holidaymakers can expect their pound to go a lot further, making holidays to Greece a very attractive proposition.

Location and Overview
Greece is one of the most magical and idyllic places to be found in the world, located in the south of Europe and bordered by The Aegean Sea to the east of the mainland, the Ionian Sea to the west and the Mediterranean to the south.

A holiday in Greece is high on the wish list of the British traveler seeking sun, value and something special. With Crusader castles and Roman ruins set in stunning countryside and sun-drenched beaches and coves lapped by sheer blue Aegean waters, Greece makes for the perfect holiday destination.

Why is Greece popular?
From the hot Mediterranean climate and the hospitality of the Greek Islands to the chic and hedonistic resort playgrounds, Greece has something for everyone and becoming more and more popular particularly with the British.

The largest of the Greek Islands is Crete, which is characterised by golden sandy beaches and dramatic rugged mountains. With a host of attractive resorts on offer and cloud-free summers, Crete is a perfect choice. To the northeast of Crete lies the island of Kos with an unsurpassed shoreline and secluded coves. For those seeking something exciting, buzzing Kardamena has streets lined with bustling bars, English pubs with karaoke, and vibrant nightclubs. Nearby Rhodes has a number of great resorts that cater to all tastes. The serene and beautiful town of Lindos has pretty whitewashed houses and quaint cobbled streets. Cosmopolitan Faliraki, on the other hand, offers lively bars, nightclubs and restaurants, proving very popular with young Brits.

For something a little more traditional, try the resorts of Kefalonia, Zante (which featured in the Cosmos top 10 holiday destinations) or Skiathos with a mix of stunning beaches, laidback lifestyle and ancient history. The island of Corfu lies north west of the Greek mainland, boasting picture-postcard villages, and famous vineyards.

Greece – The Ideal Holiday Destination in 2012?

With so many varied and extensive tourist attractions, Greece holidays offer great value for money. With lots of cheap holidays on offer, and Greece keen to welcome tourism, a holiday to this remarkable country is an attractive opportunity in these tough times.

Source: Post Office Travel Money,