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Funding freezes as cash clock ticks

 Commission confirms troika will arrive next week, while Athens will have money until end-July

By Nikos Chrysoloras

BRUSSELS - The European Commission confirmed on Monday that is it officially freezing funding to Greece from the bailout mechanism until its inspectors, along with those of the European Central Bank and the International Monetary Fund, complete their assessment of the country’s economy.

The inspectors of the so-called troika are expected to arrive in Athens next Monday.

Questioned on Greek funding by Kathimerini, Amadeu Altafaj, the spokesman for Economic and Monetary Affairs Commissioner Olli Rehn, pointed to last Thursday’s Eurogroup decision for the disbursement of 1 billion euros withheld from the May tranche of 5.2 billion euros.

However, Altafaj continued, any further disbursements will come after a valuation of Greece’s progress to date and possibly an update of the memorandum agreement, as well as a decision by the Eurogroup and the IMF to approve the installment’s payment. Rehn had warned on Thursday that the country’s smooth funding cannot continue during the valuation process by the troika, which has not carried out an assessment of Greece’s finances since last March.

Cashwise, time is therefore running out for Greece, which Altafaj appeared to be aware of, stressing the urgent character of the troika visit that was postponed due to the ailments of Prime Minister Antonis Samaras and Vassilis Rapanos -- originally proposed as finance minister.

Reliable sources have told Kathimerini that if the government uses the reserves of 3 billion euros from the Hellenic Financial Stability Stability (HFSF) and issues another set of treasury bills, it will be able to cover its cash needs until the end of next month. Consequently, that is the absolute deadline for the completion of any negotiations to follow in the next days and weeks.

As for the substance of negotiations regarding the adjustment of the bailout program, European officials expressed reservations on Monday over the blueprint agreed to by the three coalition parties in Athens. They noted that there are proposals that cannot be accepted, such as changes in labor relations, saying that “the IMF is going to go away.”

ekathimerini.com , Monday June 25, 2012 (22:53)  
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