ECONOMY

Euro area should be ready to unblock Greek aid, Juncker says

Luxembourg Prime Minister Jean- Claude Juncker hailed Greece?s budget-cutting efforts and said the other 16 euro-area governments should be prepared to unblock emergency aid for the country in response.

?I am very happy with the performance the Greek government has undertaken,? Juncker, who also heads the group of euro-area finance ministers, told reporters early Friday in Brussels after the first session of a European Union summit. ?Now it?s up to the other 16, after Greece will have delivered, to deliver.?

The Greek government of Prime Minister Antonis Samaras has been negotiating with the euro area and International Monetary Fund over extra fiscal-austerity measures to qualify for a 31 billion-euro disbursement of aid. That instalment, most of which would be to recapitalize banks, is part of a 130 billion-euro rescue package approved earlier this year after an initial 110 billion-euro bailout in 2010.

The euro area and IMF froze the transfer of funds to Greece in June after domestic opposition to spending cuts widened, authorities stalled on slashing the budget and the country held an inconclusive election in May and a re-run the following month. Samaras?s New Democracy party is the biggest in the Greek parliament without having a majority.

Samaras formed a government with the Socialist Pasok, which came in third, and the sixth-place Democratic Left with pledges to keep Greece in the euro while fighting for more time to meet austerity targets. The ruling coalition is an unprecedented attempt at political unity in Greece after an anti-bailout party called Syriza overturned four decades of dominance by New Democracy and Pasok with second-place finishes in the May and June elections.

?It?s quite impressive to see how seriously these consolidation efforts are shared by the major part of the Greek political society,? Juncker said. ?We should not blame Greece but encourage Greece to implement all the measures which they decided.?

[Bloomberg]