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Euro leaders might soon release second cache of Greece funds

Press Trust of India  |  Berlin 

They indicated after their discussions at the European Union summit in Brussels that the euro group is waiting for a report of the "troika" experts of the European Union, the International Monetary Fund (IMF) and the European Central Bank (ECB) to give its final go-ahead to release the next installment from the second rescue package of 130 billion euros (USD 168 billion) pledged in March.

They appreciated that an agreement was reached by the Greek government with its international creditors on the key issues concerning the implementation of the reforms.

The euro group is looking forward to the conclusion of the on-going review and it "will take the necessary decision" after examining the "troika" report, the leaders of the 17-nation single currency bloc said in statement today.

A 'troika' team has been examining during the last three months Greece's compliance with the structural reforms and austerity measures it had agreed when it was offered the second bailout.

The final stages of the negotiations were about new austerity measures needed to raise an additional 13.5 billion euros (USD 17.6 billion) over the next two years.

The European Commission announced on Wednesday that the troika mission ended its work in Athens and reached an agreement with the Greek government on the main areas of the reforms and some more discussions are needed to sort out some remaining issues.

The commission said it expected a final agreement in the coming days.

The heavily indebted nation, which received the first bailout of 110 billion euros in May, 2010 after it triggered the euro zone debt crisis, made "good progress" in implementing reforms agreed with its international creditors and this enabled the country to put its structural adjustment programme back on its track, euro zone leaders said.

"We welcome the determination of the Greek government to deliver on its commitments and we commend the remarkable efforts by the Greek people," the statement said.

The euro group leaders said they expected Greece to continue budgetary and structural policy reforms and encouraged its efforts to ensure a swift implementation.

They are necessary to improve the competitiveness of the private sector, to promote private investments and to increase the efficiency of the private sector.

"These conditions will allow Greece to achieve renewed growth and will ensure its future in the euro area," the statement said.

However, it is unclear whether Greece will be given an extra two years it had asked for to meet the spending cuts demanded by its international creditors.

Greece has been arguing that after five years of recession and shrinking revenues, its deficit reduction targets cannot be achieved by spending cuts alone.

The IMF had backed its calls for more time to meet the targets of its bailout.

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First Published: Fri, October 19 2012. 23:15 IST