Eurozone ministers signal easing on austerity


The eurozone could be turning its back on the all-austerity answer to the sovereign debt crisis as finance ministers consider giving Greece more time to meet its budget deficit objectives, after Portugal won similar concessions last week.

Days after a favourable German court ruling, surprisingly smooth Dutch elections and the unveiling of an unprecedented bond-buying plan, Europe's financial leaders meeting in Cyprus over the weekend might even have taken off their jackets.

In Cyprus, IMF chief Christine Lagarde said it was worth considering giving Greece more time to make the cuts demanded of it by its bailout programme, something Athens has requested.

Greece will get more time to repay its debts to international lenders but will not get more money, Austrian Finance Minister Maria Fekter confirmed in a newspaper interview printed on Sunday (16 September).

Having made strenuous efforts to shore up Spain and Italy, it would make no sense to tip Greece into default now and plunge the currency bloc back into chaos, EU officials said, suggesting the eurozone might be moving towards a more general easing of austerity measures across the bloc.

In Athens, a Greek finance ministry official said no specific proposals emerged from the weekend's eurogroup meeting as to how a postponement of the country's deficit reduction targets could be financed.

Greece's possible reprieve on budget deficit goals comes after the EU and IMF, said on (11 September they had agreed to scale back Portugal's fiscal goals under an international bailout.

Criticism of new tax hikes in Portugal, agreed as part of a €78 billion bailout, grew louder last week as opposition socialists threatened to end a cross-party backing for the bailout by voting against the 2013 draft budget.

Broad political consensus behind austerity has so far differentiated Portugal from other eurozone strugglers like Greece, the scene of frequent unrest over austerity.

The troika of European Commission, International Monetary Fund (IMF) and European Central Bank is compiling a report on how well Athens is fulfilling terms on its €130 billion rescue package.

International lenders are likely to reach final decisions on the revised financing programme for Greece in the second half of October, Greek Finance Minister Yannis Stournaras said.

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