BRUSSELS (AP) _ Greece's international lenders have prepared a “positive” report on the country's reform efforts -- a crucial step in its efforts to secure the next installment of its bailout loan, the head the of group of finance ministers from the 17 euro countries said Monday.
Jean-Claude Juncker, head of the eurogroup and also prime minister of Luxembourg, said one important issue remains unresolved: how much time Greece will be given to reduce its debts to a manageable level.
Juncker said eurozone finance ministers meeting Monday evening in Brussels would discuss whether Greece should be given extra time to cut its debt to a sustainable level of 120 percent of its gross domestic product beyond the original deadline of 2020.
Still, Juncker said, the report _ prepared by the so-called troika of international lenders, composed of the IMF, the European Central Bank, and the European Commission, which is the European Union's executive branch _ will show that Greece has made impressive efforts to implement the needed reforms.
“The basis is positive because the Greeks have really delivered,” he said.
The issue of Greece's debt is a divisive and important one. If Greece's debts can't be reduced to a level where it no longer relies on further international bailouts, then the (euro) 240 billion ($305 billion) in bailout loans already agreed for Greece will have been wasted. Current projections suggest Greece is way off from reaching its 2020 debt-to-GDP deadline.
Greece has been asking for more time to implement reforms and budget cuts _ hoping that a slower pace will release the stranglehold such cuts have on the economy. Without growth, Greece can't ever hope to collect enough in taxes to put a dent in its debts. But easing up on the timeline will cost more money, and politicians are nervous they won't be able to sell that to voters. Some countries are also irritated that Greece has consistently missed the deadlines set for it.
Many economists have argued that the country doesn't just need more time but an outright reduction in its debt, with its Eurozone creditors agreeing to take losses on some of their loans.
In a sign of how contentious the issues surrounding Greece are, German officials said they don't even consider the troika's findings final.
“As far as I know, this final, ultimate troika report is not there yet; only individual parts which will then flow into this final report,” said Finance Ministry spokeswoman Marianne Kothe. “I think it is rather unrealistic for there to be a final decision today.”
Jutta Urpilainen, Finland's finance minister, also said the report was incomplete as she headed into Monday's meeting and said she thought the eurogroup would probably have to meet again this week to discuss Greece.
Greece, which hopes for a new (euro) 31.5 billion ($40 billion) bailout loan, faces a bond repayment Friday that it cannot afford. Laboring under a mountain of debt and facing a gaping budget deficit, Greece has been relying on international bailout loans from the troika.
The country is mired in a deep recession heading into its sixth year, with more than a quarter of Greeks unemployed.
However, no decision on giving Greece the (euro) 31.5 billion loan will be made Monday because some eurozone parliaments must approve the deal.
Also Greek lawmakers approved the country's 2013 austerity budget early Monday, another essential step toward unblocking the new payment.
A spokesman said the European Commission welcomed the adoption of the budget.
“We'll still need to analyze in detail the final version of the bill. ... Nonetheless, it very clearly meets another key condition for moving closer to a disbursement of the next tranche of financial assistance for Greece,” Simon O'Connor, the spokesman, said.
Associated Press writers Raf Casert in Brussels and Geir Moulson in Berlin contributed. Don Melvin can be reached at http://twitter.com/Don_Melvin