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Funding gap threatens aid to Greece

Future funding for Greece's loan program may not be available, according to a report in the German newspaper Sueddeutsche Zeitung.

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A protestor sits on the street in front of the Greek Parliament in Athens on July 17, 2013. Greece must fill a funding gap to secure future loans from the IMF. (Angelos Tzortzinis/AFP/Getty Images)

Greece needs another 10 billion euros ($13.1 billion) by September to plug a funding gap which could threaten the disbursement of further aid, German newspaper Sueddeutsche Zeitung cited a senior official from the European Commission as saying Wednesday.

The international funds for highly-indebted Greece are insufficient to help the country to emerge from the crisis, the paper said. Immediately after the summer recess, euro countries would need to discuss further financing for the Greek program, a senior European Commission told the Sueddeutsche Zeitung.

The report comes just ahead of a trip to Athens by the German Finance Minister Wolfgang Scheauble on Thursday. With German elections due in September 22, it is unlikely that the German minister can commit to more aid, the paper added.

Athens ground to a halt on Tuesday as Greek workers went on strike in protest at thousands of planned public sector job cuts, ahead of the visit.

A spokesperson from the European Commission declined to comment on the report.

Greece has received tens of billions of euros in loans from its euro zone partners and the IMF since mid-2010 to avert bankruptcy. A funding gap has emerged however, which will need to be plugged in order to secure further IMF loans.

Under IMF rules, loan programs need to be fully financed for a 12-month period or the IMF withholds loan disbursements.

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Original Source URL: 
http://www.cnbc.com/id/100891803

http://www.globalpost.com/dispatch/news/business/debt-crisis/130717/loan-Greece-IMF-aid-EU