Euro bailout in doubt for Greece

Brussels – Greece’s historic 230 billion (NZ$361B) lifeline was in grave doubt yesterday after European finance ministers postponed a meeting that was expected to rubber-stamp the bailout, accusing Athens of failing to meet its obligations.

The scheduled meeting in Brussels had been expected to give the EU’S blessing to the rescue package endorsed through gritted teeth by Greek MPS on Monday as rioters laid siege to the centre of Athens.

But the EU said that the Greeks had not done enough to convince their creditors. ‘‘I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the programme,’’ Jean-claude Juncker, chairman of the Eurogroup, said.

Instead of meeting in Brussels, finance ministers of the 17 countries in the eurozone will now discuss Greece’s further requirements in a conference call.

They still want to know how the government proposes to close a

325 million fiscal gap looming this year.

Athens now has a further five days to satisfy the group, which is to meet in Brussels next week.

EU leaders are still expected to endorse the two-layered package at a summit in Brussels on March 1, only 19 days before Athens must redeem 14b of loans. Without funds from the biggest bailout package in history, Greece will default.

The eurogroup is particularly concerned about statements from Antonis Samaras, leader of the conservative New Democracy party, suggesting that he could tear up the pact if he becomes prime minister. His party is favourite to win a general election expected in April.

Samaras, a long-standing opponent of the German-driven austerity drive, told Parliament during Monday’s debate: ‘‘I am calling on you to vote for the new loan agreement because I want to avoid falling into the abyss, to restore stability, so that we can have the possibility tomorrow to negotiate and change the policy that is being imposed upon us today.’’

To EU leaders weary of the intractable debt crisis, Samaras’ remarks sounded like a provocation. Because of the long history of missed targets, Greece will not see any new money until it has implemented what the EU calls prior actions.

These are pledges made by Athens that include fiscal, structural and financial reforms to government finances, labour markets and the social security programme, as well as steps to overhaul the banking sector.

With trust in Athens at rock bottom in the northern part of the eurozone, ministers insist that Greece comply fully with all the terms that they set out last month to Lucas Papademos, the caretaker prime minister.

‘‘The [Greeks] must first do their homework better,’’ said Dutch Finance Minister Jan Kees de Jager, whose government is one of the hardliners among the creditor states. The Netherlands wanted to examine the consequences of the package on growth and debt before voting on it, he added.

EU Economic Affairs Commissioner Olli Rehn said he was sure the deal would be approved soon.