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Fresh doubts over Greek bailout plan

European finance ministers have cancelled a meeting to discuss Greece’s second bailout, creating further uncertainty over Greece’s commitment to austerity reforms demanded by its creditors.

Jean-Claude Juncker, the prime minister of Luxembourg who heads the Eurogroup of eurozone finance ministers, said Wednesday’s meeting had been replaced by a conference call because Greece had failed to meet all the conditions needed in order to receive its next rescue loan.

Juncker said the group had not yet received assurances from Greek political leaders over their commitment to cuts, despite the measures being passed by the country’s parliament. He said Greece had also still to detail how it planned to cover a budget gap of $428m.

Jan Kees de Jager, the Netherlands finance minister, said: “We should have everything clear on paper. We don’t give an inch. We want everything, a complete package…”

Greece needs access to the 130bn-euro loan ($170bn) in order to avoid defaulting on its debts next month, when it is due to pay out 14.5bn euros ($19bn) in redeemed government bonds.

Greek leaders are furious. Christos Papoutisis, public order minister, said: “Greece has made all the efforts that it needed to do, and the people cannot take any more. The government is making superhuman efforts and we have reached the limits of the social and economic system.”

Lack of trust

Al Jazeera’s Barnaby Philips, reporting from Athens said, said: “There is no doubt that the EU is holding the Greek feet to the fire, if you like.”

“It’s a lack of trust from the European leaders, perhaps particularly Germany and Netherlands,” he said.

“The record of the past two years, unfortunately, has suggested that Greek leaders cannot always deliver. On this side there will be exasperation, despair – a feeling that enormous sacrifices have been made and now European partners need to show solidarity and need to help Greek people.”

Another Al Jazeera correspondent John Psaropoulos, reporting from Athens, said the cancellation was the latest in a line of procedural hiccups.

He said Greek officials had gone to Brussels “unprepared” with respect to precisely where the 325m euro [$428m] that was still outstanding from a proposed 3.9bn euros in cuts would come from.

“What I am hearing from the Greek government is that about [$132m] of that sum remains to be clarified.”

Our correspondent said $262m would be culled from military expenditure and local government spending, with several hundred jobs in local government set to be eliminated by June 2012.

Election date set

The setback came a day after Greece announced a date for general elections as well as passing tough new austerity measures aimed at saving the country from bankruptcy.

Lucas Papademos, Greece’s unelected prime minister appointed in November to steer the country through its debt crisis, had indicated that he did not intend to serve the full two years remaining of parliament’s mandate.

Papademos, who heads a coalition of the country’s Socialist and main conservative parties, said his only aim was to negotiate the write-down of part of Athens’ debt and ensure that it qualified for a new European bailout payment.

He says that the consequences of a Greek default, including probable exclusion from the eurozone, would be worse tahan the effects of the austerity measures, pitching the country into social and economic chaos.

The country has also been rocked by days of strikes, protests and street clashes amid anger over the extent of the cuts.

At least 45 buildings were burned during riots on Sunday, including one of Athens’ oldest cinemas. Dozens of stores and cafes were also smashed and looted.

Authorities said 106 police needed medical care after being injured by petrol bombs, stones and other objects hurled at them. At least 70 protesters were also admitted to hospital.

Police arrested at least 74 people and detained a further 92.

Greece has already endured several rounds of austerity cuts amid efforts to put its economy in order, prompting a fall in GDP of seven per cent in the fourth quarter of 2011, according to figures released on Tuesday.

 

Source: Al Jazeer

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