NICOSIA, Cyprus—Euro-zone finance ministers indicated Friday they are open to giving Athens more time to meet budget targets and that they aim to decide by the end of October on whether to give Greece its next installment of a bailout money.
In their first gathering after a long summer hiatus, finance ministers from the 17-member currency bloc spent the morning discussing the economic and financial crises of Greece, Spain, Portugal and Cyprus.
They were joined later by the 10 ministers from the rest of the European Union to debate proposals, released this week, for a system of common banking supervision.
The meeting comes days after the European Central Bank announced a revamped plan for purchases of government bonds in the open market in coordination with the euro zone's rescue funds, and follows a German constitutional court ruling clearing the way for the launch of the European Stability Mechanism, the permanent bailout fund.
Friday's gathering turned attention back to the governments of bailed-out countries and what they will do to implement tough reforms to qualify for support from the currency bloc.
Ministers sought to keep pressure on the Athens government, which hopes to win approval soon for the next disbursement in its €173 billion ($224.7 billion) second bailout package.
The Greeks "need to show very strongly decisive action" on structural reforms and spending cuts, said Luxembourg's Jean-Claude Juncker, head of the Eurogroup of finance ministers.Athens must agree to a "set of credible measures to close the fiscal gap between 2013 and 2014," he said.
Mr. Juncker said he didn't expect a Eurogroup decision on the Greek disbursement "before the second half of October."
There was no question of the country leaving the euro zone, he aid. There were signals—all the more notable because they came from the normally hawkish Dutch and Austrian finance chiefs—that Athens will get some leeway.
"I believe that Greece has presented a budget with very much ambition," said Austrian finance minister Maria Fekter. "We will give the Greeks the time they need but there probably won't be more money."
Speaking on his way into Friday's meeting, Jan Kees de Jager, her Dutch counterpart, said that "if the deficit turns out to be worse than expected due to a temporary downturn in the economy, there could be some time, but not extra money."
The Greek government is holding talks with its lenders on €13.5 billion in fresh budget cutbacks the country must introduce to meet budget goals over the next two years.
The country has indicated it would like to spread the reforms over four years instead of two. IMF spokesman Gerry Rice told a briefing Thursday there were "good arguments" for extending the deadline for Greece to meet its budget targets under the program, but said that "such an extension would be dependent on the ability to offer financing."
Greece's creditors are unanimous that this is Athens's last chance to deliver on its pledges if the financing is to continue.
Without the loan payment, the government would run out of cash within weeks and would have to find new ways of financing pension payments, public-sector wages and other public services. In an extreme scenario, failure to satisfy its creditors may require Greece to leave the euro zone.
A two-year extension would cost Greece's creditors at least €20 billion, according to Greek government officials. Meanwhile, Spanish Finance Minister Luis de Guindos, who had to step out the meeting because he was suffering from flu, again deflected questions over whether Spain would seek a broad bailout.
An in-depth audit of Spain's banks due for release next week would show their capital needs to be "in line with expectations." A preliminary audit indicated Spanish banks would require around €60 billion of new capital.
The euro zone had offered Spain up to €100 billion. While Irish Finance Minister Michael Noonan said Madrid should move quickly to clarify its funding needs, others stated there was no pressure on Spain to decide whether to ask for a broader economic bailout.
The ECB said last week it would buy the bonds of members states in secondary markets only after receiving a formal request for a bailout "No one is backing the full program option--it's not being discussed," French Finance Minister Pierre Moscovici told reporters after meeting with peers.
The ministers praised Lisbon's commitment to reforms in a statement and said they were confident the country would regain market access next year.
The Eurogroup urged Cypriot authorities, who have been discussing the possibility of borrowing money from Russia, to "rapidly clarify their intentions" on whether they would ask for euro-zone help.
wsj.com
In their first gathering after a long summer hiatus, finance ministers from the 17-member currency bloc spent the morning discussing the economic and financial crises of Greece, Spain, Portugal and Cyprus.
They were joined later by the 10 ministers from the rest of the European Union to debate proposals, released this week, for a system of common banking supervision.
The meeting comes days after the European Central Bank announced a revamped plan for purchases of government bonds in the open market in coordination with the euro zone's rescue funds, and follows a German constitutional court ruling clearing the way for the launch of the European Stability Mechanism, the permanent bailout fund.
Friday's gathering turned attention back to the governments of bailed-out countries and what they will do to implement tough reforms to qualify for support from the currency bloc.
Ministers sought to keep pressure on the Athens government, which hopes to win approval soon for the next disbursement in its €173 billion ($224.7 billion) second bailout package.
The Greeks "need to show very strongly decisive action" on structural reforms and spending cuts, said Luxembourg's Jean-Claude Juncker, head of the Eurogroup of finance ministers.Athens must agree to a "set of credible measures to close the fiscal gap between 2013 and 2014," he said.
Mr. Juncker said he didn't expect a Eurogroup decision on the Greek disbursement "before the second half of October."
There was no question of the country leaving the euro zone, he aid. There were signals—all the more notable because they came from the normally hawkish Dutch and Austrian finance chiefs—that Athens will get some leeway.
"I believe that Greece has presented a budget with very much ambition," said Austrian finance minister Maria Fekter. "We will give the Greeks the time they need but there probably won't be more money."
Speaking on his way into Friday's meeting, Jan Kees de Jager, her Dutch counterpart, said that "if the deficit turns out to be worse than expected due to a temporary downturn in the economy, there could be some time, but not extra money."
The Greek government is holding talks with its lenders on €13.5 billion in fresh budget cutbacks the country must introduce to meet budget goals over the next two years.
The country has indicated it would like to spread the reforms over four years instead of two. IMF spokesman Gerry Rice told a briefing Thursday there were "good arguments" for extending the deadline for Greece to meet its budget targets under the program, but said that "such an extension would be dependent on the ability to offer financing."
Greece's creditors are unanimous that this is Athens's last chance to deliver on its pledges if the financing is to continue.
Without the loan payment, the government would run out of cash within weeks and would have to find new ways of financing pension payments, public-sector wages and other public services. In an extreme scenario, failure to satisfy its creditors may require Greece to leave the euro zone.
A two-year extension would cost Greece's creditors at least €20 billion, according to Greek government officials. Meanwhile, Spanish Finance Minister Luis de Guindos, who had to step out the meeting because he was suffering from flu, again deflected questions over whether Spain would seek a broad bailout.
An in-depth audit of Spain's banks due for release next week would show their capital needs to be "in line with expectations." A preliminary audit indicated Spanish banks would require around €60 billion of new capital.
The euro zone had offered Spain up to €100 billion. While Irish Finance Minister Michael Noonan said Madrid should move quickly to clarify its funding needs, others stated there was no pressure on Spain to decide whether to ask for a broader economic bailout.
The ECB said last week it would buy the bonds of members states in secondary markets only after receiving a formal request for a bailout "No one is backing the full program option--it's not being discussed," French Finance Minister Pierre Moscovici told reporters after meeting with peers.
The ministers praised Lisbon's commitment to reforms in a statement and said they were confident the country would regain market access next year.
The Eurogroup urged Cypriot authorities, who have been discussing the possibility of borrowing money from Russia, to "rapidly clarify their intentions" on whether they would ask for euro-zone help.
wsj.com
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