Official: Greece gets 2-year extension on bailout

October 24, 2012 12:00:00 AM PDT
Greece's Finance Minister claims the country has been granted an extension from international rescue lenders to meet the terms of its bailout program, signaling progress after weeks of talks to secure emergency loan payments.

One of the conditions of Greece's current €240 billion bailout program is that it reforms the economy so the country can return to the bond markets to raise money by 2014. Greece has asked for a two-year extension on this deadline so that it has time to introduce austerity measures and labor market reforms.

The government has recently been locked in negotiations with international creditors over a €13.5 billion ($17.56 billion) package of new austerity measures for the next two years.

Speaking in Parliament, , Finance Minister Yannis Stournaras said Wednesday said that Greece now had an extension to reform its finances, but gave no details.

"We have not gone bankrupt because we still have funds remaining from the previous installment," Stournaras told parliament.

"What have we achieved today? We have achieved the extension ... If we had not been granted that extension, today we not only have needed to take measures worth €13.5 billion euros, but €18.5 billion ($24 billion)."

However, authorities in Europe have not confirmed the agreement, stressing that they are still awaiting a report on Greece's economic reforms from the "troika" of international debt inspectors - the European Union, European Central Bank and International Monetary Fund. Simon O'Connor, a spokesman for European Monetary Affairs Commissioner Olli Rehn told reporters in Brussels that there has been "no agreement yet".

In Berlin, Chancellor Angela Merkel's spokesman Steffen Seibert reiterated that the German government cannot and won't make a decision until it receives the troika report.

"There is no troika report so far and that's why we have no basis to have discussion," he told reporters in Berlin.

"We are waiting for the troika report with everything it will tell us about the facts and the data and then we make a decision," he added.


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