ECONOMY

EU officials seem reluctant on bridge loan

European Union officials are reluctant to extend Greece the bridge loan it has said it is seeking from its international creditors — the European Commission, European Central Bank and International Monetary Fund, known as the troika — to cover a 3.2-billion-euro loan that comes due on August 20, Skai understands.

According to sources, officials in Berlin and Brussels are not prepared to consider the request by Greece?s Finance Ministry for the extension of such a loan before the troika issues a much-awaited report on Greece?s reform progress.

Troika officials have indicated that they could show flexibility on which measures are taken as long as they achieve the required revenue. But there appears to be growing impatience at Greece?s lack of progress in meeting deficit reduction targets.

On Wednesday German Finance Minister Wolfgang Schaeuble suggested the euro zone could handle a Greek exit. ?The risks of contagion for other countries of the euro zone have been reduced and the euro zone as a whole has become more resistant,? Schaeuble was quoted as telling the Rheinische Post newspaper.

Eurogroup Chairman Jean-Claude Juncker also appears to have hardened his stance. Asked if it would be better if Greece left the euro, he told German news magazine Der Spiegel last Sunday, ?the Greek government has not implemented the program as agreed.? He added that it would cost more to give Greece an extension to meet targets. ?This raises two questions,? he said. ?Firstly, are Europeans prepared to put up extra resources? And secondly, will the IMF come on board?”

The Eurogroup chief has indicated that Greece could be supported in the repayment of a bond that comes due on August 20. A Greek Finance Ministry official said on Tuesday, however, that Athens was seeking a bridge loan from foreign lenders to cover the 3.1-billion-euro bond repayment.