Yves Logghe, Associated Press
LUXEMBOURG — The eurozone's financial chiefs were under pressure to find new ways to relieve Greece's debt crisis on Monday, after Athens acknowledged that its deficit will be higher than it had promised in return for a massive bailout.
Greece's revelation calls into question whether Athens will receive the next installment of a bailout loan it needs to pay its day-to-day bills. If it doesn't receive the €8 billion ($10.8 billion) slice by mid-October, the debt-ridden country will be unable to pay pensions and salaries and eventually go bankrupt.
The admission also casts a shadow over a second, €109 billion bailout tentatively agreed in July, when it became clear that the initial €110 billion rescue package would not be enough.
Germany and several other countries have been pushing to impose larger losses on banks holding Greek bonds as part of the second bailout, since a sharp recession is eating away at Greece's debt reduction efforts.
But countries with banks that have a large exposure to Greece, such as France, have been reluctant to consider such an option.
Amid the disagreements, officials arriving for a meeting in Luxembourg quickly sought to lower expectations.
"We won't take a decision today on the next tranche for Greece today," said Luxembourg Prime Minister Jean-Claude Juncker, who chairs the finance ministers' meetings.
European Monetary Affairs Commissioner Olli Rehn also wouldn't be drawn out on what Greece's rescue creditors will do with the new information out of Athens.
"We are currently assessing whether Greece will meet its fiscal targets with the current measures," Rehn said ahead of Monday's meeting. "I want to do our job first properly."
Greece said Sunday that it will run a deficit of 8.5 percent of economic output, or €18.69 billion ($25.2 billion), this year — far above the promised €17.1 billion ($23.1 billion), which would have been 7.8 percent of GDP.
The news added to investors' fears that even the country's dramatic spending cuts and billions of euros in rescue loans from other eurozone countries and the International Monetary Fund may not be enough to get it back into a position where it can repay its enormous debts. It sent the euro plummeting to near-2011 lows against the dollar.
German Finance Minister Wolfgang Schaeuble — whose country is the eurozone's largest economy and has been very strict on the budget targets — did little to reassure investors, saying that ministers would wait for a report from Greece's debt inspectors before taking any decisions.
That position was not popular with all of his colleagues, especially those from countries that risk being hurt by a Greek default.
"With every day that passes we send negative signals. We lose time, and also a lot of options," said Belgian Finance Minister Didier Reynders. Reynders said he hoped that ministers would decide in the coming days to transfer the money to Greece, citing the country's efforts over the past year.
Shares in Franco-Belgian bank Dexia tumbled 10 percent Monday after ratings agency Moody's warned its may soon downgrade the lender's creditworthiness. Dexia, like several large French banks, has faced market pressure in recent weeks amid worries over its exposure to Greece. Reynders said both France and Belgium were standing behind their banks.
Officials sought to present Monday's meeting as a pit stop in the negotiations toward a broader solution to the eurozone's debt crisis.
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