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Euro Zone Ministers Optimistic as They Meet on Greece Euro Zone Ministers Optimistic as They Meet on Greece
(about 5 hours later)
BRUSSELS — With euro zone finance ministers resuming talks on Greece’s intractable debt in Brussels on Tuesday, the chairman of the group declared that “Greece has delivered.” BRUSSELS — With euro zone finance ministers resuming talks on Greece’s intractable debt on Tuesday in Brussels, the chairman of the group declared that “Greece has delivered.”
“We must still reach an understanding on several details,” Jean-Claude Juncker, the prime minister of Luxembourg and chairman of the Eurogroup of finance ministers, said before the meeting. “I would expect that the chances are good that we will come to a final and joint solution this evening.”“We must still reach an understanding on several details,” Jean-Claude Juncker, the prime minister of Luxembourg and chairman of the Eurogroup of finance ministers, said before the meeting. “I would expect that the chances are good that we will come to a final and joint solution this evening.”
That still could be an ambitious goal, given the rancorous nature of finance ministers’ recent meetings on Greece, which have dragged into the night without a conclusive result. Other ministers expressed caution as they arrived for the meeting.That still could be an ambitious goal, given the rancorous nature of finance ministers’ recent meetings on Greece, which have dragged into the night without a conclusive result. Other ministers expressed caution as they arrived for the meeting.
The discussion focuses on a €31.5 billion, or $40.2 billion, installment of loans from an international bailout program, but Greece is likely to get a total of €44 billion because two additional installments are due by the end of the year under the program. The discussion focuses on a 31.5 billion euro, or $40.2 billion, installment of loans from an international bailout program, but Greece is likely to receive a total of 44 billion euros because two additional installments are due by the end of the year under the program.
The program, worth €130 billion, has been frozen since June, when creditors determined that Greece was failing to meet the conditions of the bailout. The program, worth 130 billion euros, has been frozen since June, when creditors determined that Greece was failing to meet the conditions of the bailout.
Late Monday, the Greek government issued two decrees intended to satisfy its creditors’ outstanding demands. One calls for all funds raised through the privatization of state assets to be paid into an escrow account. Money in the account, held at the central bank, would be used to pay down government debt. Late Monday, the Greek government issued two decrees intended to satisfy its creditors’ outstanding demands. One calls for all money raised through the privatization of state assets to be paid into an escrow account. Money in the account, held at the central bank, would be used to pay down government debt.
Among the issues the Eurogroup must resolve is how to provide Greece with the funds needed to give it two more years to make budget cuts, requiring nearly €33 billion on top of existing bailouts. Among the issues the Eurogroup must resolve is how to provide Greece with the money needed to give it two more years to make budget cuts, requiring nearly 33 billion euros on top of existing bailouts.
“I have preferences and that means no fresh money because it is difficult to explain to our taxpayers,” Maria Fekter, the Austrian finance minister, said as she arrived at the meeting. “I have preferences and that means no fresh money, because it is difficult to explain to our taxpayers,” Maria Fekter, the Austrian finance minister, said as she arrived at the meeting.
Ms. Fekter said there were “creative” solutions on the table, including the possibility of lowering the interest rates on loans. “There will be no single answer, there will be a package,” she said.Ms. Fekter said there were “creative” solutions on the table, including the possibility of lowering the interest rates on loans. “There will be no single answer, there will be a package,” she said.
Another critical challenge is smoothing over differences among the troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund — about how quickly Greece should be obliged to bring its towering debt under control. Another critical challenge is smoothing over differences among the so-called troika of lenders — the European Commission, the European Central Bank and the International Monetary Fund — about how quickly Greece should be obliged to bring its debt under control.
Christine Lagarde, managing director of the I.M.F., emphasized the importance of the issue to her organization, which, under its rules, cannot continue lending unless Greece’s debt is deemed sustainable. Finding a solution was “our goal, our purpose and our mission,” she said.Christine Lagarde, managing director of the I.M.F., emphasized the importance of the issue to her organization, which, under its rules, cannot continue lending unless Greece’s debt is deemed sustainable. Finding a solution was “our goal, our purpose and our mission,” she said.
In a public disagreement at the previous Eurogroup meeting last week, Ms. Lagarde insisted that Greece cut its debt to the fund’s target of 120 percent of gross domestic product by 2020. But Mr. Juncker recommended giving Greece until 2022, a position shared by Germany.In a public disagreement at the previous Eurogroup meeting last week, Ms. Lagarde insisted that Greece cut its debt to the fund’s target of 120 percent of gross domestic product by 2020. But Mr. Juncker recommended giving Greece until 2022, a position shared by Germany.
The difference is a highly sensitive matter for Greece’s biggest creditors in the euro zone, and for Germany in particular. Berlin is wary of political repercussions from higher costs that would result from meeting the 2020 deadline. The difference is a thorny matter for Greece’s biggest creditors in the euro zone, and for Germany in particular. Berlin is wary of political repercussions from higher costs that would result from meeting the 2020 deadline.
The Greek debt is now estimated at 175 percent of G.D.P. and the economy could shrink again next year. The Greek debt is now estimated at 175 percent of G.D.P., and the economy could shrink again next year.
“The I.M.F. has its own conditions on what is sustainable and what isn’t,” Wolfgang Schäuble, the German finance minister, said Tuesday.“The I.M.F. has its own conditions on what is sustainable and what isn’t,” Wolfgang Schäuble, the German finance minister, said Tuesday.
Prime Minister Antonis Samaras of Greece, who is struggling to hold together an increasingly fragile coalition, hopes that a final push by Athens to tie up loose ends could help speed up funding for the two-year extension to the country’s fiscal adjustment period. Prime Minister Antonis Samaras of Greece, who is struggling to hold together a fragile coalition, hopes that a final push by Athens to tie up loose ends could help speed money for the two-year extension to the country’s fiscal adjustment period.
The decrees issued Monday are a type of emergency measure that does not require parliamentary approval, and come a little more than a week after the government approved austerity measures and overhauls to be carried out over the next four years worth €17 billion, or $22 billion. The decrees issued Monday are a type of emergency measure that does not require parliamentary approval, and they come a little more than a week after the government approved austerity measures and overhauls to be carried out over the next four years worth 17 billion euros, or $22 billion.
One decree requires that money raised from the privatization of state assets be paid directly into an escrow account held by the Greek central bank to ensure the funds go toward paying off state debt. The account was set up in March under the terms of Greece’s second international bailout. One decree requires that money raised from the privatization of state assets be paid directly into an escrow account held by the Greek central bank to ensure the money goes toward paying off state debt. The account was set up in March under the terms of Greece’s second international bailout.
That decree also calls for tougher supervision of spending by ministries and state enterprises. It grants the Finance Ministry greater powers to oversee other ministries and calls for the appointment of inspectors to monitor spending at departments that fail to meet their fiscal targets for two consecutive quarters. Top officials whose departments miss their targets face the prospect of having their salary cut or being laid off. Local agencies that fail to get their finances in order must raise additional tax revenue to meet their goals. That decree also calls for tougher supervision of spending by ministries and state enterprises. It grants the Finance Ministry greater powers to oversee other ministries and calls for the appointment of inspectors to monitor spending at departments that fail to meet their fiscal targets for two consecutive quarters.
A second decree sets out cuts to the salaries and pensions of parliamentary employees who, with bonuses, earn the equivalent of up to 16 monthly salaries annually. That would bring their pay into line with that of other civil servants.A second decree sets out cuts to the salaries and pensions of parliamentary employees who, with bonuses, earn the equivalent of up to 16 monthly salaries annually. That would bring their pay into line with that of other civil servants.
State workers, who have vowed to overturn some of the overhauls imposed by Greece’s creditors, including plans to push 2,000 employees into a fast-track layoff program this year, continued to stage sit-ins at hundreds of city halls and municipal offices across the country.State workers, who have vowed to overturn some of the overhauls imposed by Greece’s creditors, including plans to push 2,000 employees into a fast-track layoff program this year, continued to stage sit-ins at hundreds of city halls and municipal offices across the country.
Finance Minister Yannis Stournaras said late Sunday that Athens had done its bit. “We are fully ready for Tuesday,” he said. “There are no outstanding issues on our side.”Finance Minister Yannis Stournaras said late Sunday that Athens had done its bit. “We are fully ready for Tuesday,” he said. “There are no outstanding issues on our side.”
Olli Rehn, the E.U. commissioner for economic and monetary affairs, said he hoped that resolution of the funding issue would send a clear signal. Olli Rehn, the European Union’s commissioner for economic and monetary affairs, said he hoped that resolution of the aid issue would send a clear signal.
“Now it is essential that we will be able to clear the air from all uncertainty about Greece, still hanging over Greece and thus over all of the euro zone,” Mr. Rehn said before the meeting. But the Eurogroup’s decision is not final. Some national parliaments, including Germany’s, must also approve the aid.
But the Eurogroup’s decision is not final. Some national parliaments, including Germany’s, must also approve the release of funding.

James Kanter reported from Brussels and Niki Kitsantonis from Athens.

Niki Kitsantonis reported from Athens.