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Euro countries voice doubts over Greek bailout

By Gabriele Steinhauser

Associated Press

Published: Wednesday, Feb. 15 2012 6:46 a.m. MST

Greek Finance Minister Evangelos Venizelos, right, speaks to the press after a meeting with the Greek President Karolos Papoulias in Athens Wednesday, Feb. 15, 2012. Greece's finance minister said that all pending issues in its international creditors' requirements for the country's second bailout will be completed ahead of a Wednesday evening conference call between eurozone finance ministers. Venizelos made the comments after a meeting with President Karolos Papoulias, who he said will give up his presidential salary to help in the crisis.

Petros Giannakouris, Associated Press

BRUSSELS — There are strong doubts among some of the countries that use the euro over whether a second massive bailout can actually save Greece, officials said Wednesday, even as Athens rushed to meet tough conditions to qualify for the €130 billion ($170 billion) rescue.

The wrangling over Athens' aid money comes after almost two years of frantic efforts to save Greece from bankruptcy and secure its place in the 17-country currency union.

But circumstances have changed since the eurozone agreed on a first €110 billion ($144.86 billion) rescue for Greece back in May 2010.

Several politicians — especially in rich euro countries like Germany, the Netherlands and Finland — have grown tired of Greece repeatedly missing budget targets and failing to implement promised spending cuts, economic reforms and sales of state assets. The measures that have been put into practice, meanwhile, have pushed the country into steep recession, with its economy shrinking 7 percent in the final quarter of 2011 from a year earlier.

At the same time, at least some policymakers are optimistic that the eurozone is now strong enough to handle a default by Greece, which is one of the smallest economies in the currency union, responsible for only about 2 percent of its economic output. Meanwhile, other lawmakers are concerned that the shockwaves of a disorderly Greek default would be felt across the rest of Europe and the world's financial markets.

"There are many in the eurozone who don't want us any more," Greece's Finance Minister Evangelos Venizelos told the country's president, Karolos Papoulias, during a meeting to inform him of the latest developments. Greece, Venizelos added, had to persuade the skeptics that the country could stay in the currency union and regain lost ground in reforming its economy.

"We are facing a situation that is particular because we are constantly being given new terms and conditions," the finance minister said.

Venizelos' negative assessment was backed by an official in Brussels.

"There is resentments, mistrust, really bitter debate," said a European official, who has been briefed on recent talks between eurozone finance chiefs. The official was speaking on condition of anonymity because of the sensitivity of the topic.

Tuesday night, a meeting between eurozone finance ministers planned for Wednesday was canceled after Athens failed to deliver in time on several demands made the previous week. The country's international creditors — the other 16 countries that use the euro and the International Monetary Fund — are insisting that the austerity measures have to be implemented before Greece can get a second, €130 billion ($172 billion) bailout.

Eurogroup chairman Jean-Claude Juncker said he was still missing details on how to save an extra €325 million ($427.99 million) as well as written assurances by the leaders of the main political parties that they will stick to a second bailout program after elections expected for April.

Wednesday afternoon, the head of Greece's Conservative party, Antonis Samaras, sent a letter to the country's international creditors committing to the terms of the second international bailout.

"We will remain committed to the program's objectives, targets and key policies," Samaras, likely Greece's next prime minister, wrote.

However, he also stated that policies might have to be modified in order to help the economy recover from the deep recession it is currently in, although he underlined these would not change the ultimate targets in reforming the economy.

Socialist party head George Papandreou sent his letter Tuesday night, officials said. They also said that the €325 million ($427.99 million) in cuts should be secured by the end of the day.

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