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EU denies multi-billion-euro funding gap in Greece

Media reports claiming Greece needs to plug a huge new hole in its budget have been dismissed as untrue by the EU Commission. Greece’s creditors must still agree on emergency funding this summer, one report says.

The rescue program for Greece was sufficiently financed, and reports in the German media about a funding gap of 10 billion euros ($13 billion) were wrong, the European Union Executive Commission said Wednesday.

Funding was absolutely sure for the next 12 months, and should the need arise to discuss additional financing beyond that period it would be done in due course, Simon O'Connor, spokesman for EU Currency Commissioner Olli Rehn, told a news conference in Brussels.

O'Connor admitted, however, that a small funding gap to the tune of 4.6 billion euros would open up at the end of the program in 2014. This was nothing new, he added.

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Greece to receive more aid

Under the terms of the Greek bailout program, rescue funding for the debt-laden eurozone country is planned to expire by the end of 2014 in hopes that Greece would then be able to return to international capital markets for financing its debt.

However, Germany's daily newspaper Süddeutsche Zeitung reported Wednesday that Greece's creditors - the EU Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) - would have to meet immediately after the summer break to discuss more aid. Otherwise, a shortfall in the Greek rescue package to the tune of 10 billion euros would open up, the newspaper reported.

Sufficient funding for one year is a statutory precondition for the IMF to participate in any bailout program.

The news came as Greek lawmakers were set to vote on an unpopular bill aimed at paving the way for mass layoffs in the public sector. Athens is under pressure to slash up to 25,000 public jobs before its international lenders can approve a new bailout installment worth 6.8 billion euros.

uhe/kms (Reuters, AFP)

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