Eurogroup keeps Greece hanging on until October

Greece faces an anxious wait to find out if it will receive its next loan tranche of 8 billion euros after eurozone finance ministers agreed on Friday to delay until the beginning of October the final decision on whether the money should be disbursed.

Without the next installment from its eurozone partners and the International Monetary Fund, Greece faces bankruptcy as its reserves to pay public sector wages and pensions will run out. Finance Minister Evangelos Venizelos warned after the Eurogroup meeting in Wroclaw, Poland that the consequences of such a development would by ?truly dramatic.?

Sources said that Venizelos was given a thorough grilling by his counterparts with respect to the measures Athens plans to adopt over the next few months in a bid to reduce its public deficit. Each proposal was thoroughly scrutinized by the other finance ministers, who in some cases asked Venizelos to come up with alternative steps in case the ones he has planned do not have the desired effect.

The Greek finance minister is due to have a teleconference with troika representatives on Monday before top officials from the European Commission, the European Central Bank and the International Monetary Fund return to Athens to deliver their final assessment on whether Greece should receive its sixth loan tranche. The Eurogroup is due to meet again on October 3, when it is expected to give its verdict on whether Greece should receive the 8 billion euros. If the green light is given, the money is likely to be disbursed on October 14.

Venizelos was adamant that Greece would have to meet all the goals it has agreed with the troika over the months to come or it would default. ?All Greeks should understand that if all this does not happen now, the consequences will be truly dramatic,? he said, suggesting that a bankrupt Greece would be forced out of the eurozone.

Sources said that some of the conditions that Greece will have to meet to secure the 8 billion euros are the immediate implementation of the across-the-board wage structure in the public sector, the placement of thousands of civil servants on reduced wages in a labor reserve, the speeding up of privatizations and further reforms to labor laws.

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