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Germany approves EU bailout fund

Xinhua, September 30, 2011

• Greek Finance Minister Evangelos Venizelos expressed satisfaction on Thursday with the German parliament's approval of a stronger eurozone bailout fund while government sources in Athens voiced optimism over the rescue of the country from default.

  The German parliament on Thursday noon voted to endorse the expanded power of the European Financial Stability Facility (EFSF), which will be used for the support of ailing economies, such as Greece, with an overwhelming majority of 523 yes to 85 against.

  The outcome is regarded as a significant step in the process of the ratification of EFSF's new institutional framework by all 17 member states of the eurozone and the implementation of the decisions of the July 21 summit for the further support of Greece with a second bailout pact and the protection of euro.

  "The result of the vote in the German parliament is connected with the fact that Greece has sent a very clear and decisive message at an international level that it meets its obligations that stem from the support mechanism," said Venizelos in a statement released by his office Thursday afternoon, as he winded up a meeting with inspectors of international lenders in Athens.

  "Those are not obligations towards the troika (EU, ECB and IMF), Greece's institutional partners and creditors, but towards the country itself and most of all towards its young generation," added the official statement.

  Debt-ridden Greece narrowly escaped bankruptcy last year after securing the first multi-billion euro EU/IMF aid package, pledging painful austerity and bold structural reform measures in exchange. But due to delays in meeting deficit cutting targets and deliberations with lenders over the release of the next tranche of aid, there has been a new wave of scenarios of a possible bankruptcy as earliest as next month.

  Following a three-week lull in the review of Greek finance which will open or close the way to the sixth tranche in October, EU/IMF auditors returned to Greece and held talks with Venizelos on Thursday afternoon, launching a new round of deliberations with Greek officials over the next steps to be made.

  The meeting was held at the building which houses the offices of the Deputy Prime Ministers in central Athens, since the Finance Ministry building is occupied from early Thursday by civil servants who protest the austerity measures.

  Greek Finance Ministry sources expressed satisfaction with the climate of the meeting, according to local media, noting that the "atmosphere of the whole discussion was positive and productive, after the announcement of a new set of measures."

  Over the past three weeks the Greek government announced a fresh round of cuts on salaries and pensions, tax increases and pledged acceleration of a privatization program and reforms to achieve budget reduction targets, boost the competitiveness of Greek economy and restore growth by 2014, such as massive lay-offs of civil servants.

  Greek officials argue that this austerity and reform drive is essential to the rescue of the ailing economy. Protesters, who stage 48-hour sit-in protests in a dozen ministries in Athens starting from Thursday, claim that they can not afford the cost of these changes.

  EU/IMF auditors will hold a series of meetings with Venizelos and other Greek ministers in the coming days, before submitting an assessment report to the European Commission, the European Central Bank and the International Monetary Fund upon which a decision on the disbursement of the next tranche will be reached.

  Without it, Greece will run out of cash by November.

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