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Eurogroup opens session Monday to discuss tranche for Greece

July 08, 2013, 3:56 UTC+3
The finance ministers of 17 countries of the eurozone will discuss a regular report about Athens' progress in reducing budget deficit
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BRUSSELS, July 8 (Itar-Tass) - The allocation of a new tranche of international aid to Greece, and financial consequences of the political crisis in Portugal will be the main subjects of discussion at a Eurogroup session on Monday.

The Finance ministers of 17 countries of the euro zone, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), and Jorg Asmussen, Member of the Board of the European Central Bank (ECB) will discuss a regular report to be presented by the three international creditors (European Commission, ECB and IMF) about Athens' progress in effecting structural reforms with a view to reducing budget deficit. However, as experts point out, it will refer, rather, to the lack of progress in this respect.

According to European sources, the Greek budget revenue continues to decline owing to recession, and the government of the country runs out of time to cut spending sufficiently enough to achieve the necessary reduction in deficit. In particular, Athens has already announced that will be unable to dismiss 4,000 publicv employees towards the end of this year.

In result, it turned out that the allocation of yet another international tranche of 8.1 billion euros to Greece in accordanc with the second international anti-crisis programme is put into question. That country lives exclusively on financial support from the outside and would face an invevitable default without such support.

Olli Rehn, European Commissioner for Monetary and Financial Financial Affairs, suggested breaking the tranche into several installments and provide them as Athens fulfils its obligations.

As far as Portugal is concerned, the new political crisis in that country has again cast doubts on prospects for the implementation of its three-year anti-crisis programme worth 78 billion euros, which is to result in the country's comeback to financial markets in 2014. Portugal's dilemman is that it met all the demands of the international creditors in full. However, that did not help stabilize the situation in the country, which led to a new peak of social strain.

Within the context of Latvia's entry into the euro zone on January 1, 2014, the Ministers must also endorse an exchange rate of its national currency -- the Lat against the Euro. As of the present moment, one euro is equal to about 0.7 lat.

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