EU pleas for guarantees: Eurogroup cancels Greek bailout meeting

A Wednesday meeting on extra rescue loans for Greece, which the country had hoped would help it avoid default, has been cancelled by the Eurogroup chief as EU leaders demand tougher guarantees that Greece uses the money properly.

­Jean-Claude Juncker, head of the Eurogroup – the collective of 17 eurozone finance chiefs – has cancelled a meeting on the Greek bailout that was scheduled for Wednesday. A teleconference will be held instead, with another meeting due on Monday. Juncker says “further technical work” is needed “in a number of areas" related to the Eurogroup's demands of the Greek government.

Greece must meet specific conditions for the €130 billion ($171 billion) deal – but before agreeing to provide the emergency funding, EU leaders want to secure firmer guarantees from the crisis-stricken country. Athens faces this deadline while simultaneously lobbying for European approval of a separate debt relief deal with private creditors that must be agreed upon by March 20, and will need several weeks to kick in.

Juncker said the Eurogroup is waiting to learn how Athens plans to save the €325 million ($428 million) eurozone officials demanded last week. Greece's cabinet of ministers was still discussing the issue on Tuesday evening.

The EU's finance ministers want Greece’s two main political parties to assure them that the promised spending cuts and reforms would be implemented following national elections due in April. According to Juncker, his organization has not received such guarantees.

Meanwhile, Greek New Democracy party leader Antonis Samaras has not signed an austerity commitment with the country’s international lenders. An insider on the negotiations over the new EU/IMF bailout told Reuters Tuesday on condition of anonymity that “so far, Samaras has not given a letter of commitment – and this is a problem.” New Democracy officially declined to comment. A separate source at the PASOK socialist party said its leader, George Papandreou, had already provided a signed assurance that he would support measures passed by parliament early Monday.

As many as  €110 billion ($145 billion) were granted to Greece in 2010.

­Greece blames Europe for ignoring its sacrifices

­Following the meeting's cancellation, Greek cabinet ministers accused Europe of insensitivity to the country's recent sacrifices.

Christos Papoutsis, Greece's Public Order Minister, said his government had made “superhuman efforts” to comply with Europe's demands, and in doing so had stretched the country's social and economic system to its limits, AP reports. Papoutsis says Europe must also bear some of the responsibility.

“Greece has owned up to its own responsibilities, and the sacrifices of the Greek people are huge. I believe it is time for everyone to own up to their responsibilities,” he stated.

A similar reaction came from Manolis Othonas, Greek Deputy Minister for Civil Protection, who is also calling on the eurozone to recognize his country’s sacrifices.  

Following Greek passage of another austerity program Tuesday, the Moody's ratings agency downgraded the credit ratings of six EU countries and lowered its outlook on an additional three. This isn’t the first time European ratings have been downgraded on the heels of measures aimed at fighting the crisis on the continent.

The EU and IMF demanded the new budget cuts as the price of a second €130 billion debt rescue. The new program includes cuts to the country's minimum wage and further layoffs in the public sector.

The measures have been met with explosive protests and the some of the worst violence the Greek capital has seen in years. A 100,000-strong demonstration hit the streets of Athens while parliament was still voting, with some 2,000 anarchist protesters causing a riot. Officials say 45 buildings were wholly or partly destroyed by fire in the protest.