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Greek Bailout Held Up as More Austerity Demanded

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Greece has passed its torch of promises to the European Union, which is now playing with fire as it debates holding up a second bailout package for Athens. Finance ministers doubt that Greece will keep its promises of austerity once elections are held, and are considering how to withhold funds without triggering a complete default.

Reuters reported Wednesday that EU finance ministers have little faith in Greece’s assurances of compliance with the conditions for its next bailout and, in fact, have demanded stricter measures. Despite promises in writing from conservative party leader Antonis Samaras, among others–Samaras is viewed as likely to be Greece’s next prime minister–officials have lost patience with Athens. They fear that, once elections are held, Greece’s new leaders may renege on any promises of austerity made now to get the money.

Dutch Finance Minister Jan Kees de Jager was quoted saying, “It is fair to say that my patience has run out. We have to see the evidence of implementing the measure into law and just promises are not enough, not anymore.” He is not alone; other officials are trying to figure out a way to provide just enough funding to allow Greece to make a massive bond payment due March 20 but withhold the rest without triggering a default.

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One unidentified official was quoted in the report saying, “There are proposals to delay the Greek package or to split it, so that an immediate default is avoided, but not everything is committed to. They’ll discuss the options.” He added, “There is pressure from several countries to hold off until there is a concrete commitment from Greece, which may not come until after they’ve held elections.”

Finland, Germany and the Netherlands are spearheading that move, with Germany talking about holding up funding till after elections.