Finance chiefs ready to give Greece $14b to pay bills

Luxembourg Prime Minister Jean-Claude Juncker. Photo / AP

The eurozone's finance chiefs indicated yesterday that Greece will get a loan instalment it needs to keep paying its bills, even after Athens admitted it would not be able to cut its budget deficit as much as it had promised in return for help.

Fears have been growing that Greece, despite billions of euros in rescue loans, will eventually have to default on its huge debts, rocking the global economy as it is still struggling to recover from recession.

"We had no one advocating a default for Greece. Everything will be done to avoid that and it will be avoided," said Luxembourg Prime Minister Jean-Claude Juncker after talks yesterday.

Juncker, who also chairs the meetings of eurozone finance ministers, said the other ministers would decide on the payment of the €8 billion ($14 billion) slice of its first €110 billion bailout "in the course of October."

The country would be able to meet its financial obligations as long as it received the money in November, he said.

That contradicted earlier statements from the Greek Government, which has said it would be forced to stop paying salaries and pensions if it doesn't get the payment by the middle of this month.

The financial leaders of the 17-country eurozone were under strong pressure to provide solutions to the currency union's worsening debt crisis.

The eurozone hopes that the payment of the next aid instalment to Greece will buy them time to come up with a broader solution to the crisis and reinforce their financial safety nets.

In the United States, President Barack Obama insisted that Congress vote on his entire US$447 billion ($593 billion) economic plan this month, a step promptly rejected by Republicans who called for both sides to find common ground in their competing proposals to stimulate growth.

Obama demanded Republicans spell out their objections to his plan, expressing confidence that the public supports his call for more spending on public works projects and on job security for teachers and police officers.

"Ultimately, they've got to do the right thing for the American people," Obama said of legislators.

Republicans have already specified which pieces of Obama's plan they could support, and House Majority Leader Eric Cantor said yesterday some of those measures would get a vote this month.

But he said the Republican-controlled House would not act on the President's jobs bill in its entirety.

"This all-or-nothing approach is unreasonable," the Virginia Republican said.

Obama's jobs plan would reduce payroll taxes on workers and employers, extend benefits to long-term unemployed people, spend money on public works projects and help states and local governments keep teachers, police officers and firefighters on the job.

He would pay for the plan with tax increases on wealthier Americans and by closing corporate tax loopholes.

- AP