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Greece unlikely to get bailout funds before October

A protester of the "Occupy Frankfurt" movement wearing a Guy Fawkes mask, made popular by the graphic novel "V for Vendetta", stands next to the Euro currency sign sculpture in front of the European Central Bank (ECB) headquarters in Frankfurt August 6, 2012. (REUTERS/Alex Domanski)

BRUSSELS: International auditors will remain in Athens all of September, a European source said Wednesday, meaning Greece is unlikely to get its next installment of bailout funds before October.

Auditors from Greece’s international creditors “will remain in Greece the entire month of September in order to present European finance ministers in October agreed measures – a credible and solid plan for Greece,” said the official who asked not to be identified.

A favorable report from the auditors of the so-called troika of the European Union, International Monetary Fund and European Central Bank is key to disburse its part of Greece’s next installment of 31.5 billion euros in rescue funds.

The disbursement had previously been expected in September, already a delay due to a two-month political deadlock caused by back-to-back elections in May and June.

The delay could pose difficulties for the Greek government, which is already expected to resort to issuing fresh short-term debt in order to repay 3.2 billion euros to the ECB on Aug. 20.

Getting a favorable decision from the auditors is not assured.

“Much work remains to be done,” the source said.

Greek Finance Minister Yannis Stournaras said Tuesday that the government had yet to identify about a third of 11.5 billion euros ($14.2 billion) in spending cuts it needs to make in 2013 and 2014 under its bailout program.

The creditors are reportedly at odds, with the Wall Street Journal reporting that the IMF believes in order for Greece’s finances to be sustainable its debt-to-GDP ratio should be brought down to 100 percent by 2020, instead of the 120 percent under current plans.

The European Commission rejected shifting the target, which would imply that eurozone governments or the ECB accept losses on funds provided to Greece.

 
A version of this article appeared in the print edition of The Daily Star on August 09, 2012, on page 6.

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