EU defers Greek bailout decision

EU defers Greek bailout decision
European Union leaders cancelled a meeting slated for Wednesday to decide on a second rescue package for Greece, and instead stepped up pressure on the nation to commit to severe austerity measures in exchange for seeking the aid.

The EU leaders insisted that Greece must deliver more assurances on its latest austerity accord in order to seek the second rescue package, throwing the ball back into Greece's court.

The EU leaders will hold a teleconference on Wednesday to increase pressure on Greece to commit to its austerity accord.

"I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program," the Eurogroup head Jean-Claude Juncker said on Tuesday.

EU policymakers insist that Greece must identify further spending cuts to plug a hole of 325 million euro to ensure that the budget deficit target for 2012 was achieved.

Greek political parties must provide written guarantees that the austerity accord including the required painful spending and pension cuts would be timely implemented, EU leaders voiced.

The Greek Parliament on Monday approved the enforcement of austerity measures, required to seek the 130 billion euro second bailout fund.

The delay in the bailout decision raises the risk of a catastrophic default for Greece. The debt ridden nation needs to pay 14.5 billion euro as debt repayment this March.

A default may force Greece to exit the euro, an event that may cause severe global financial market turmoil.

Dion Global Solutions Ltd

Read more about: euro zone, euro
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