Arab Today, arab today auditors return to greece as crisis hits crunch
Last Updated : GMT 06:58:51
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Auditors return to Greece as crisis hits crunch

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Arab Today, arab today Auditors return to Greece as crisis hits crunch

Athens - AFP

Global creditors announced on Wednesday the return of auditors to Greece in a bid to break an impasse over billions of euros in blocked bailout loans Athens needs to avoid default. Nearly four weeks after abruptly leaving the city, EU and IMF negotiators will restart tough number crunching from Thursday amid mounting social tension and what the European Union describes as the biggest challenge of its history. Efforts to resolve the wider debt crisis, which the United States fears will trigger another worldwide downturn, are embroiled in national feuding with German Angela Merkel suggesting a second Greek bailout may need renegotiated. Berlin, Paris and the European Central Bank are also at odds over how much Europe\'s banks should lose in the event of a default, which would require massive recapitalisation of bankruptcy-threatened lenders. Adding more uncertainty, Slovakia announced it would not stage a crucial parliamentary vote on expanding the powers of the eurozone\'s broader rescue fund until October 25 -- which means leading Europeans can expect to face renewed American pressure when G20 finance ministers meet in Paris on 14-15 October. \"This sort of in-fighting amongst Europe\'s leaders will only serve to undermine the recent rally in shares and the euro, underlining the importance of the audit\'s findings,\" said Moneycorp in a note to investors. Once auditors decide the government in Athens is doing enough to merit more financial aid, eurozone partners and the International Monetary Fund will still have to sign off the money. Finance ministers meet on Monday in Luxembourg, but EU economic affairs spokesman Amadeu Altafaj indicated that the negotiations in Athens would not be concluded in time for a decision by then. He said another meeting of the 17-nation currency Eurogroup would be called to make that decision \"as soon as possible.\" While Greece is left waiting for the funds from a first 110-billion-euro ($150 billion) bailout approved last year, a few eurozone states have yet to sign off on a second 159-billion-euro Greek rescue package that was agreed in July. German lawmakers are due to vote on Thursday on expanding the scope and size of the EU\'s current rescue fund -- the European Financial Stability Facility (EFSF) -- which has already helped bail out Ireland and Portugal. The parliament in Finland, another country where there is deep-rooted reluctance to bailing out eurozone strugglers, finally approved changes to the fund on Wednesday, but is still just the tenth of the 17 states to have done so. \"We are today faced with the greatest challenge our Union has known in all its history,\" European Commission president Jose Manuel Barroso warned in his annual \"state of the union\" address to the European Parliament in Strasbourg. Greek Prime Minister George Papandreou, who held talks in Berlin on Tuesday with Merkel, said his country was making a \"superhuman effort\" to bring down its massive debt of more than 350 billion euros ($475 billion). But in an interview with Greece\'s state television, Merkel said the audit could also determine if the second bailout set up in July will stand as originally agreed. \"Should we renegotiate or not?\" Merkel said. \"Of course we would prefer that the figures remain unchanged, but I cannot foretell (the mission\'s report).\" A government spokesman said Greece would escape default. \"We are not far from securing (the loan tranche). One by one, pending issues are settled,\" deputy government spokesman Angelos Tolkas told Flash Radio. However the Financial Times reported the bailout had run into trouble, with some eurozone members pushing for private creditors to take a bigger writedown on their Greek bond holdings. The Greek parliament on Tuesday approved a controversial property tax that aims to plug a budget hole and help unlock the EU-IMF funds but this package is still not enough to save the Greek economy. The Greek government is under pressure to jumpstart a privatisation drive that is months behind schedule, and that creditors want to see contribute 50 billion euros worth of income. Greek austerity measures have met fierce resistance and Athens was again paralysed by a transport strike Wednesday, with police again using tear gas, ahead of protests by pensioners, municipal workers and students. Pushing for more unity in Europe, Barroso promoted the creation of controversial joint eurozone bonds, despite German opposition, saying they would be a \"natural and advantageous step for all\" against the crisis. Seeking to prevent future debt crises, the European parliament adopted on Wednesday stiffer budget rules armed with the threat of fines against governments with runaway deficits and debts. In Paris, the French government took its own steps to rein in spending for next year. Ratings giant Standard & Poor\'s has previously warned Paris could suffer a downgrade depending on what steps Europe takes to fill a wider financial black hole over coming years.

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