Greek funding hangs on troika mission: official

Reuters News
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Posted: Jul 14, 2012 11:20 AM
Greek funding hangs on troika mission: official

By Robin Emmott

BRUSSELS (Reuters) - It is too early to say how Greece will meet its financing needs and discussions can only begin once a lenders' mission returns to Athens, two EU officials said on Saturday, but a senior policymaker has said there was no cause for concern.

Prior to Greece's elections, the previous government said its cash reserves would be exhausted by the end of July, and a report on Saturday suggested the European Central Bank could consider allowing Greece to delay a bond payment in August.

Citing EU officials, Bloomberg also said Greece might sell more three-month Treasury bills or seek bridge financing.

But one ECB source told Reuters that nothing could be discussed until a review of the country's finances is underway by the "troika" lenders from the ECB, the EU and the International Monetary Fund that is due to go to Athens on July 24.

"It is premature to have a discussion about this before the troika team has even returned to Athens, we are still in a fact-finding stage at the moment," said the source, who declined to be identified because of the sensitive nature of the talks.

Another EU official echoed that position, saying that while a solution would be found to ensure the new Greek government meets its obligations and does not run out of money, nothing had been decided at this stage.

Jean-Claude Juncker, Luxembourg's prime minister who chairs euro zone finance ministers' meetings, has sought to reassure investors and Greece itself. When asked last week if Greece would face financing problems, he said: "In the month of August, we will find a solution. There will be no problems."

He declined to give more details but added: "We agreed to discuss the situation in Greece again when the findings of the latest troika meeting are available."

Greece's new finance minister, Yannis Stournaras, met his euro zone counterparts at the meeting last Monday in Brussels and promised to meet the terms of the country's 130 billion euro ($159 billion) financial rescue.

Athens has conceded that it has fallen behind agreed targets and some euro zone officials have warned the country will get no further aid until it gets back on track with reforms.

(Additional reporting by Marilyn Gerlach in Frankfurt)