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Waiting game

May 11, 2011

As IMF and EU auditors conduct a review of Greek reforms, European politicians are warning against too much speculation about the need for restructuring. Meanwhile, Greek workers held nationwide strikes on Wednesday.

The acropolis under an EU map
Decisions on Greece's economic future will have to waitImage: DW/AP

The European Union's Economic Affairs Commissioner, Olli Rehn, said Tuesday that the EU would have to wait for the findings from a review of Greek austerity measures before any assessment of whether or not to restructure the country's debt or provide a new economic bailout could be made.

Auditors from the European Union, the European Central Bank, and the International Monetary Fund are carrying out a scheduled check of Athens' finances, the results of which are likely to be released in June.

"The jury is still out," Rehn said in Strasbourg. "It is still too early to pass final judgment on these programs."

Speculation has mounted in recent weeks that Greece would need a drastic overhaul of the terms of last year's 110 billion euro ($157 billion) bailout or that Athens may need a completely new bailout to stay afloat.

There has also been speculation that Greece could abandon the euro altogether, giving up the eurozone's common currency.

Merkel weighs in

Olli Rehn
Rehn does not want to speculateImage: dapd

German Chancellor Angela Merkel, one of the key players in brokering the original international bailout for Greece last year, echoed Rehn's sentiment about drawing premature conclusions on Greece.

"We don't do Greece any favors if we speculate," Merkel told reporters in Berlin on Tuesday.

"I am of the opinion that the conclusions to be drawn from the findings must await the findings," she added, referring to the ongoing review of Greece's finances.

Meanwhile, Rehn said that Ireland, which received its own international bailout in November, would likely have its interest rate for paying back the loan dropped to a similar level to that of Greece or Portugal, which also has received international financial aid.

"It is important that in defining the interest rate, debt sustainability is firmly taken into account and therefore the commission already some time ago proposed a reduction of the interest rate for Ireland in order to help Ireland overcome its debt burden in the same way as Greece or Portugal," Rehn said.

Final approval for dropping the interest rate lies with the EU's finance ministers and could come at a meeting of the ministers next week in Brussels.

Strikes on Wednesday

Greece's two main unions, GSEE and ADEDY, which represent around the half the workforce, held a 24-hour strike on Wednesday to protest against the government's austerity measures.

Public sector workers downed tools in museums, ministries, schools as well as radio and television stations; flights and many ferry services were grounded across the country.

Authors: Matt Zuvela, Nicole Goebel (AFP, Reuters, dpa, AP)
Editor: Nancy Isenson