EU finance ministers to consider withholding Greece aid

AP News
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Posted: Sep 09, 2016 6:00 AM
EU finance ministers to consider withholding Greece aid

BRATISLAVA, Slovakia (AP) — EU finance ministers discussed Friday whether to withhold bailout aid to Greece once again amid signs that the country is falling short of its commitments to reform its economy.

Greece is struggling to keep up the pace of economic measures demanded by creditors in exchange for continued loan payouts, and is hoping to start talks by the end of the year for more lenient debt repayment terms.

It is supposed to meet 15 "milestones" or conditions for the disbursement of 2.8 billion euros ($3.15 billion) — the latest tranche of money from its bailout. But the country is unlikely to be able to meet a Sept. 15 deadline. And while the ministers do not appear concerned about stretching that deadline, there are limits — the disbursement of the money has to happen by October at the latest.

While Greece has made some progress in reshaping its economy, the bailout loans are saddling it with a huge amount of debt that many experts say it has no real prospect of repaying. The national debt is set to peak this year at a whopping 182.8 percent of gross domestic product, according to European Commission estimates.

Slovak Finance Minister Peter Kazimir, whose country holds the rotating EU presidency, had praise for Greece's efforts to put its economic house in order but said Athens' job is not done.

"They did a lot, but a lot of homework is ahead of them," he told reporters on arrival to the two-day meeting.

He said the cases of Spain and Portugal, which have deficits above the EU limits, also would be discussed. He indicated, however, that the ministers were not particularly concerned about those nations' efforts to improve economic fundamentals would falter.

Spain could miss a deadline to submit its budget by the Oct. 15, with political parties there still not able to form a new government and the acting government likely unable to submit a realistic budget plan. But EU officials suggest they are prepared for delays.

Tax policies within the EU also were on the agenda at the Bratislava meeting amid calls for an end to corporation loopholes.

The talks are being held just over a week after the European Commission ruled that technology giant Apple didn't pay the correct tax in the European Union for more than a decade, a mounting bill that analysts say could constitute 19 billion euros ($21 billion) with interest.

Both Apple and Ireland, Apple's European headquarters, are appealing the decision.

Pierre Moscovici, the Commission's top economy official, defended the move saying Europeans "are waiting for multinational corporations to pay their taxes as common people do." He said he backed the idea of drawing up black list of tax haven countries as a detriment to unfair tax practices.

With the EU economy struggling with anemic growth, the European Central Bank urged governments in the 19-country euro currency union Thursday to do more to improve economic fundamentals.

Kazimir projected optimism nonetheless, declaring "the future is bright."

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Lorne Cook in Brussels contributed to this report.