Rehn warns EU could pull out of loan tranche

European Economic and Monetary Affairs Commissioner Olli Rehn has warned that the EU will also pull out of giving Athens its June loan installment if the International Monetary Fund withholds funds, although the Washington-based organization denied reports yesterday that Greece has missed the targets it was set.

?We Europeans are setting the same conditions as the IMF,? Rehn said in an interview with German weekly Der Spiegel. ?The situation is very serious.?

Rehn said that the EU would decided whether to release the loan tranche, worth 12 billion euros in total, following the latest audit of Greek public finances by experts from the IMF, the European Central Bank and the EU.

Der Spiegel claimed that the quarterly report by the troika would blame high government spending and inadequate tax collection for a ballooning Greek budget deficit. But the IMF denied this.

?Recent media reports claiming knowledge of the findings of the review mission are untrue,? an IMF spokeswoman said in an e-mailed statement to Reuters news agency. ?Our discussions with the authorities continue, are making good progress and are expected to conclude soon,? she said.

In a special Kathimerini supplement marking Greece?s 30 years as a member of the EU, European Commission President Jose Manuel Barroso said Brussels would continue to stand by Greece. ?Some impressive results have already been achieved,? he said of the government?s efforts, ?but it will take a little longer until the benefits can be felt.?

The supplement also carried an article by Prime Minister George Papandreou, who admitted that Greece?s membership of the EU had not led to the ?necessary changes? in several sectors, including the civil service, local government, justice, social welfare and education.

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