Talks ending on new aid to Greece
ATHENS — Talks about new austerity measures to keep Greece from defaulting on its debts are nearly over, a European official said yesterday. A report from the negotiations will determine whether Greece gets the next installment of an existing rescue loan as well as a potential second bailout to cover its finances through 2013.
European Union, European Central Bank, and International Monetary Fund inspectors have been reviewing Greece’s operations. Greece is lagging on cutting its massive budget deficit, but the financial experts’ long-delayed report will include further steps the government intends to take to get its finances in order. They reportedly include a lower income tax threshold and tax increases on tobacco and heating fuel.
More than a year after being bailed out, Greece remains stuck in recession and locked out of the international debt markets. It faces massive funding gaps in 2012 and 2013, when Greece was supposed to raise money again.
European officials have said that no decision on more rescue loans can be made before the review is concluded.