ATHENS, Greece (AP) -- Greece's euro partners
won't be able to release the country's next batch of bailout cash
next week, even though the Greek Parliament narrowly backed more
unpopular austerity measures Thursday.
Germany's Finance Minister Wolfgang Schaeuble
said the 17-country eurozone is not yet in a position to make a
decision on releasing the funds, as many in Athens may have hoped.
As anticipated, the cash-strapped country still has to pass its
budget for 2013 while lawmakers in some countries, including
Germany, have to authorize the release of funds.
"We're not there yet," Schaeuble said in
Hamburg.
"I don't see how we would get to a decision
next week," he said, referring to the meeting of the eurozone
finance ministers on Monday. "Not all is lost, but not all is won."
The approval of the austerity bill, which will
further cut salaries and pensions and increase taxes, was the key
step towards persuading Greece's international creditors to release
the next (EURO)31.5 billion ($40.2 billion) installment of the
country's vital bailout loans.
Without it, the government has said the
country will start running out of cash on Nov. 16, paving the way to
Greece's potential bankruptcy and exit from the euro. That scenario
has kept financial markets on edge for the past three years.
However, Germany, the biggest single
contributor to Europe's bailouts, has insisted Greece must first
pass its 2013 budget to create the basis on which the country's
creditors can make a decision to release the new funds.
After the budget vote, which is scheduled for
Sunday, the release of the funds still hinges on a report by the
so-called troika of debt inspectors from the European Union, IMF and
European Central bank which is not expected to be ready in time for
the Monday meeting.
In addition, some euro countries such as
Germany can only give the go-ahead after their own Parliaments have
voted on it. Though those votes are not expected to take much time,
they add the prospect of further delay.
Schaeuble's comments strongly suggest an
interim financial arrangement for Greece may have to be agreed.
Sunday's budget vote in Athens represents
another test to the coalition government of Antonis Samaras.
Thursday's vote in favor of the (EURO)13.5 billion austerity package
came at a cost for the fragile three-party coalition government.
Lawmakers voted 153-128 for the package, hours
after more than 80,000 protesters demonstrated outside in Athens -
some fighting running battles with riot police.
Only two - the majority conservatives and the
Socialists - of the three parties in the coalition backed the
package. But there was also dissent in those ranks, with seven
lawmakers expelled for failing to back the measures, and an eighth
saying he was leaving the Socialists to continue as an independent
member of parliament.
Nevertheless, the government is not in
imminent threat as the third party, the Democratic Left, which
abstained from the austerity vote, insists it will continue as a
coalition member. The three parties are expected to present a united
front in the budget vote.
Greece has relied on rescue loans from its
euro partners and the International Monetary Fund since 2010. In
return, it has had to implement a series of austerity measures which
have hit the economy hard. Greece is set to enter its sixth straight
year of recession.
Figures Thursday showed unemployment figures
up at 25.4 percent in August, increasing from 24.8 percent in July
and 18.4 percent the year before. More than 1.2 million people in
this country of barely 10 million are now unemployed, with 58
percent of all young people aged 15-24 are unemployed.
Greece's (EURO)240 billion bailout package is
released in installments and is dependent on prescribed budget
targets and reforms. The latest payment has been delayed for five
months, due to political uncertainty in the spring that forced two
national elections in as many months and subsequent delays in
agreeing on the new cutbacks.
Facing a sixth year of recession, the
government has been seeking better terms for its bailout agreement -
mainly a two-year extension to meet the agreed targets.
That, however, would create a financing gap of
up to an estimated (EURO)30 billion.
ECB chief Mario Draghi made it clear that
those funds would have to come from the eurozone governments, saying
the central bank "is by and large done" with helping the country
because it is not allowed to finance the debt of its member nations.
Schaeuble, meanwhile, acknowledged the Greek
government's progress "despite the protests and the general strike"
but he also cautioned that more needs to be done to get its finances
under control.
Broad-circulation newspaper Ta Nea daily said
in an editorial that Athens must now ensure it receives the new
bailout payment in time, and kick start the economy.
"Nobody can imagine that in four months' time
(Greece's creditors) will be demanding new salary and pension cuts,"
the paper said. "Greece cannot take it - and in any case the
government will not survive it."
Police in Athens arrested five suspected
rioters during the clashes outside Parliament on Wednesday night, on
the second day of a nationwide general strike.
Unions have pledged to hold new strikes and
protests, and on Thursday taxi drivers and Athens metro, tram and
urban rail workers walked off the job.
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Baetz reported from Hamburg. Elena Becatoros
in Athens contributed.