GREECE was put in an ‘eight days to default’ situation by the ECB and the EU yesterday.
A default by Greece was technically avoided when EU ministers agreed to hand over 58bn euros, but not yet.
If they are satisfied, 58bn euros of a 130bn euro total agreed on February 21 will be handed over to Greece on March 12 to pay off government debt (bonds).
Greece has to settle 14bn euros of debt by March 20, so the delay is seen as a cliffhanger by the US and China, raising the spectre of eight days to default.
Standard and Poor’s credit rating agency has already declared Greece bankrupt.
The wriggling by finance ministers and smoke-and-mirrors bond dealers is intended to goad Greek finance minister Evagelos Venizelos into giving them a ‘positive assessment’ of austerity measures against the Greek people.
Jean Claude Juncker, head of the finance ministers for the 17-nation eurozone, said that permission to use the European Financial Stability Fund to bail out Greece would be denied until conditions were met.
Meanwhile, the new European Treaty on fiscal discipline has found its first two victims in the Netherlands and Spain.
All EU states, bar the UK and Czech Republic, signed up at Friday’s summit.
The Netherlands plans to exceed the 3% limit on budget deficits, and Spain, whose conservative government inherited an 8.6% deficit, can’t help it.
That means automatic fines for both – unless they cut tens of billions of euros in public spending.
At the European Union summit on Friday, British prime minister Cameron recovered from his pique at being ignored by Germany and France and claimed that a UK-backed ‘action plan’ to boost growth had set the agenda.
Mr Cameron got about ‘half of what he was asking for’, said EU officials.
Cameron said there was now a clear commitment to act on ‘deepening the single market in services’.
Demands to open up regulated professions, deregulation, completing the internal energy market and trade were also included in the plans.
Cameron said he had forged an ‘unprecedented alliance’ in favour of open markets and trade which included Scandinavia, Italy and Spain.
French President Nicolas Sarkozy had said that France and Germany could not consider some of what the UK PM had backed on deregulation.