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Greek bailout

November 17, 2010

Austria says it won't hand over its share of the funds for the next installment of Greece's 110 billion euro bailout until Greece fufillls its side of the bargain. Greece's 2010 deficit is even higher than thought.

a life preserver, a Greek flag, and a euro coin
Greece will likely have to wait for more fundsImage: DW/BilderBox/dpa-picturealliance

Austrian Finance Minister Josef Proell announced Wednesday that the decision to grant the delay was made on the sidelines of the EU finance ministers' meeting in Bruessels on Tuesday night. Proell said Austria would not release its share of the money because Greece had not fulfilled the requirements of the bailout agreement.

However, the EU has denied that the next loan payout will be delayed. The office of the EU's monetary affairs chief refuted Austria's claims, saying "it has always been the case that the actual release of the third tranche should be taken in December and that the release will be in January."

The European Union and the International Monetary Fund (IMF) agreed to lend Athens 110 billion euros ($150 billion) earlier this year to save the debt-wracked nation from bankruptcy. The money is to be doled out over three years, in accordance with the country's progress in reducing its budget deficit. In return, the Greek government of Prime Minister Giorgos Papandreou agreed to enact drastic austerity measures in order to get the deficit under 3 percent of gross domestic product (GDP) by 2014.

On Monday the European statistics agency Eurostat announced that Greece's 2009 deficit would exceed earlier forecasts, climbing 2 points to 15.4 of GDP, almost 2 points higher than the previously indicated 13.6 percent.

Author: Sarah Harman (AP, dpa)
Editor: Rob Turner