World - European Finance Ministers Delay Second Greek Bailout To July

European Finance Ministers Delay Second Greek Bailout To July
Vittorio Hernandez

Luxembourg City, Luxembourg

European finance ministers delayed the release of the second tranche of Greece's bailout until July.

After seven hours of discussion, the ministers set as a condition for the release the approval by the Greek Parliament of spending cuts and financial reforms, including a large-scale asset privatization program.

The release of the second part of the Greek loan - part of the $257 billion (110 billion euros) EU and IMF aid package - is expected to be approved by the ministers in their meeting this week at Luxembourg.

Among the measures initiated by the embattled Greek government that would lead to the EU and IMF approval of the loan is the reshuffling by Greek Prime Minister George Papandreou of his cabinet on Friday. Leading the revamp was the appointment of former Defense Minister Evangelos Venizelos as finance minister, replacing George Papaconstantinou.

Venizelos, who arrived for the Luxembourg meeting, pledged Greece's commitment to the financial assistance program from EU and IMF.

Papandreou admitted that Greece needs a second international bailout of $157 billion, which is as large as last year's bailout, to avoid a debt default. He appealed on Thursday to the Greek parliament for a vote of confidence as the legislators prepare to cast their crucial ballot on Tuesday.

Despite the indications of a second bailout, British banks wary of a second bailout threatened to pull billions of dollars from the eurozone.

London Mayor Boris Johnson likewise pushed for Britain not to contribute to the second bailout. The mayor said Greece should instead default on its debts and leave the euro. Johnson blames the euro's recent trouble, caused by large debts of three eurozone members, for worsening the financial crisis. He urged Chancellor George Osborne to stop throwing British taxpayers' money after bad investments.

Although British ministers are not in favor of financing the new loan to Greece, the coalition could not avoid financial involvement in the Greek bailout because of European finance rules.