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EU withholds Greek bailout until new conditions are met

EU finance ministers are refusing to release the aid package despite a deal reached by Greece’s leaders yesterday.

The Greek and EU flags fly in Athens yesterday
The Greek and EU flags fly in Athens yesterday
Image: Dimitri Messinis/AP/Press Association Images

EUROZONE MINISTERS HAVE held back a new €130billion bailout for Greece despite its leaders reaching agreement on austerity measures yesterday, saying the country must meet new conditions before the money can be released.

Greek leaders have been ordered to find an extra €325million in savings on top of those already agreed, and pass the reforms into law through the parliament on Sunday, the BBC reports.

The move reflects scepticism about Greece’s future and frustration with its leaders, who postponed crucial talks for days earlier this week. “No disbursement without implementation,” Luxembourg’s prime minister Jean-Claude Juncker told Bloomberg.

Greece needs the money to meet a bond payment on March 20, without which it will default.

But a senior official at ratings agency Fitch told Business Week that the country would need to have finalised the bailout deal over the next few days if it is to put the necessary arrangements in place and avoid a default on its debts which could set European markets in turmoil.

The decision to withhold the bailout came as EU finance minister met in Brussels.

European commissioner Olli Rehn said the onus was on Greece to show its commitment, the Guardian reports.

“It’s up to the Greek government by concrete actions through legislation and other actions to convince its European partners that the second [bailout] programme can be made to work,” he said.

More: Greece leaders reach deal on more austerity and cuts>

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Michael Freeman

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