EU seeks to keep crisis fight on track after Greek vote

FRANKFURT

Greek lawmakers’ midnight approval of a 2013 austerity budget put the onus on European finance ministers meeting later today to keep their three-year crisis fight on track. The finance chiefs gathering in Brussels intend to prevent a 5 billion-euro ($6.4 billion) Greek bill redemption on Nov. 16 from triggering an accidental default, while they’re unlikely to ratify a 31.5 billion-euro payment to Greece that has been frozen since June, a European official said Nov. 9. Greek lawmakers’ midnight approval of a 2013 austerity budget put the onus on European finance nministers meeting later today to keep their three-year crisis fight on track. “We remain confident that European support will be agreed on by the end of November, or early in December,” Erik Nielsen, London-based chief global economist at UniCredit, wrote in a note to clients. With the euro-area economic slowdown reaching Germany and stoking mounting public protests in France and Spain, German Chancellor Angela Merkel will travel to Lisbon today, following her trip last month to Athens.

European Central Bank President Mario Draghi said last week the outlook for the euro area is worsening. The euro has fallen 0.8 percent against the U.S. dollar since Nov. 7.

The European ministers will assess whether the latest round of cuts that Greek Prime Minister Antonis Samaras squeezed through parliament with 153 of 300 votes, are sufficient to warrant further aid. Samaras today garnered the support of enough lawmakers from his three-party coalition to secure approval for the 2013 budget.

Samaras has pressed for two extra years, until 2016, for Greece to meet deficit-reduction targets imposed by its creditors. That prospect opens a debate about how to plug the resulting financial hole, such as engineering a buyback of Greek debt. European leaders’ current target is to reduce Greek debt to 120 percent of gross domestic product by 2020. The European Commission last week estimated the ratio in 2014 will rise to 188.9 percent from 176.7 percent this year.