Greece worries re-ignited; lenders clash over debt timeline

Greece worries re-ignited; lenders clash over debt timeline
An unexpected and unwanted clash between Greece's international lenders over how the beleaguered nation can bring its debt down to a manageable level reignited fears on Tuesday that crisis could flare up anew.

Eurozone finance ministers suggested that Athens should be given until 2022 to lower its debt-GDP ratio to 120 per cent while International Monetary Fund (IMF) chief Christine Lagarde had a contradictory view as she insisted that the existing target of 2020 should stay.

Expressing disagreement over the views of Eurozone finance ministers, Lagarde said, "We clearly have different views. What matters at the end of the day is the sustainability of Greek debt so that country can be back on its feet."

German finance minister Wolfgang Schaeuble said the 2020 deadline was "a little too ambitious".

Also, the finance ministers agreed that Greece be given time until 2016 — from the earlier 2014 — to cut the nation's deficit to 2 per cent of GDP, putting off until November 20 a decision on how to cover additional Greek requirements of 32.6 billion euros.

This unexpected shock has come a day after Greece lawmakers approved the country's 2013 austerity budget early Monday, a step that could potentially save it from bankruptcy. Under the terms of its second bailout programme, Greece was due to receive 31.2 billion euros by the end of June and another 5 billion euros by the end of September and then 7.2 billion euros by the end of December.

Read more about: greece debt crisis
Story first published: Wednesday, November 14, 2012, 9:30 [IST]
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