Troika interrupts Greek bailout review, return later - finance minister

ATHENS Wed Mar 13, 2013 9:21pm GMT

Greece's Finance Minister Yannis Stournaras makes statements to reporters after a meeting with officials from the European Union and the International Monetary Fund at the Prime Minister office in Athens March 13, 2013. REUTERS/John Kolesidis

Greece's Finance Minister Yannis Stournaras makes statements to reporters after a meeting with officials from the European Union and the International Monetary Fund at the Prime Minister office in Athens March 13, 2013.

Credit: Reuters/John Kolesidis

ATHENS (Reuters) - An inspection team of debt-laden Greece's international lenders has interrupted a review of Athens' progress on Wednesday and will return shortly to complete it, the Greek finance minister said on Wednesday.

The so-called "troika" of EU, IMF and ECB officials had begun their latest assessment of Athens' performance in meeting the terms of its 240-billion-euro (208.4 billion pounds) bailout plan on March 3.

This is Greece's first review after its lenders unlocked fresh aid in December, staving off a chaotic bankruptcy and keeping it in the euro zone. In exchange, Athens passed a new round of austerity measures to bring its finances back on track.

"There was significant progress on all issues... they (the inspectors) will return at the end of the month or early April so we can get ready," Finance Minister Yannis Stournaras told reporters.

The inspectors' departure, announced after a 2.5-hour meeting with Prime Minister Antonis Samaras, did not mean the country risked missing its next instalment of rescue loans of more than 2.8 billion euros, the minister said.

"In my view, it (the tranche) is assured," Stournaras said without elaborating. Under a current disbursement schedule, the 2.8-billion-euro tranche is due to be paid by the end of March.

Greece has received about 200 billion euros in rescue loans since its first bailout in May 2010. But despite imposing a 75-percent debt cut on private-sector bondholders and receiving debt relief from its official lenders last year, it is still a far cry from returning to bond markets as Ireland got close to with a bond sale on Wednesday.

Athens needs further relief from its euro zone partners to make its debt sustainable and must balance its 2013 primary budget, which excludes interest payments, to obtain it.

Greece also must stick to painful tax hikes and implement other unpopular measures it has already agreed, including sacking "a large part" of 27,000 civil servants it must earmark for possible dismissal.

But with the economy in its sixth year of recession and unemployment at a record 26 percent, Athens wants to soften the agreed austerity measures and avoid any new ones.

Another contentious issue concerns terms and deadlines for a 50-billion-euro recapitalisation of banks, which risk being nationalised if they fail to complete the process in time and seek a softening of terms.

According to government sources, Athens is negotiating with the troika to allow households which are late in paying their taxes to settle them in instalments.

(Reporting by Lefteris Papadimas; Writing by Harry Papachristou; Editing by Michael Roddy)