EU makes Greece wait till late October

Greece has made progress with economic reforms but decisions on the release of crucial rescue funding are not expected until the second half of October, high-ranking foreign officials said Friday at a summit of eurozone finance ministers in Nicosia while also indicating that the country could be granted an extension to its fiscal adjustment period.

Eurogroup Chairman Jean-Claude Juncker said he was ?encouraged? by the progress made by the Greek government and said the country?s reform efforts appeared to be ?on track.? He added that decisions were not expected on the release of rescue funding until the second half of October, noting that the first priority was the release of a progress report by Greece?s so-called troika of foreign lenders, the European Commission, European Central Bank and International Monetary Fund. That report is not expected until the beginning of October ?at the earliest,? he said. Once again Juncker categorically ruled out a Greek exit from the eurozone while ECB policymaker Jorg Asmussen said such a prospect could be ?a very expensive path.?

IMF Managing Director Christine Lagarde, who was also in Nicosia, struck a similar note to Juncker, remarking that Greece had made ?huge efforts? in implementing reforms but had to keep going. She also suggested that a request by Greece for a two-year extension to its fiscal adjustment period might be granted. ?There are various ways to adjust: Time is one and that needs to be considered as an option,? she told reporters. Several eurozone officials at the summit also indicated that Greece could be cut some slack. ?We will give Greece the time it needs,? Austrian Finance Minister Maria Fekter said, noting however that ?there will probably be no more money.? Her Dutch counterpart Jan Kees De Jager had made similar comments earlier in the day.

Greece?s Finance Minister Yannis Stournaras, who presented to his eurozone counterparts his proposal for some 11.5 billion euros in austerity measures being demanded by the troika, responded cautiously when asked by reporters whether the next tranche of rescue funding was dependent on the austerity package being finalized and whether Greece would have its fiscal adjustment period extended. In both cases he answered ?all proposals are on the table.? He told reporters that there was ?convergence? between government and troika officials in talks on the austerity package. ?We haven?t agreed on everything yet but we?re on the right track,? he said.

European diplomats indicated to Kathimerini that there are fears about whether Greece?s shaky coalition government can retain its cohesion.

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