Tags: Greece | bailout | delay | details

Europe Delays Detailed Greek Bailout

Tuesday, 16 March 2010 09:46 AM EDT

LONDON -- European finance chiefs failed to produce a detailed bailout plan for Greece on Monday but laid the groundwork for a potential rescue if the financial situation in the troubled Mediterranean nation deteriorates sharply.

Analysts had hoped that a meeting in Brussels of finance ministers from the 16 nations that use the euro would yield a long-awaited plan to aid Greece, which is struggling to calm investors. Greece needs to borrow $74 billion this year to plug its budget deficit and avoid a default that could send bond and currency markets reeling in Europe and beyond.

But some European governments blame Greece for driving itself into a financial hole and remain deeply reluctant to let it off too lightly.

In a sign of that reluctance, the finance ministers who met Monday said merely that they had reached agreement on possible ways to aid Greece that did not violate European Union laws. The E.U. is prohibited from lending money to member nations to plug budget shortfalls, meaning that any rescue package for Greece would have to be tailored in a careful manner.

While declining to outline how a rescue could work, Luxembourg Prime Minister Jean-Claude Juncker, head of the eurozone economy group, said a more detailed proposal would be worked out before a meeting next week of E.U. leaders, with the size and shape of any aid package contingent on their agreement.

"In case of need, and we still don't think it will be necessary, an agreement can be reached in the euro area for coordinated action by the governments and the European Commission, and bilateral aid could be granted in this way," Juncker told reporters.

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Tuesday, 16 March 2010 09:46 AM
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