Greek vote important step, key issues remain

Greece has made an important step in approving tough new austerity measures but must still pass the 2013 budget and key issues remain before it can secure the next debt aid payment, the European Commission said on Thursday. "We welcome ... this vote as an important step in the right direction," a spokesman for European Economic Affairs Commissioner Olli Rehn said of Wednesday's parliament approval of the package agreed by Athens in return for aid funds. "There is, however, another important vote on Sunday and another successful outcome will be crucial ... to take forward the discussions" with Greece on its debt bailout programme, he said, referring to a very tough Greek 2013 budget. In effect, the votes only clear the way for negotiations on two key issues -- managing Greece's massive debt burden and its financing needs over the longer term. Those issues have to be settled before there is a final accord, he said, ahead of a eurozone finance ministers meeting Monday in Brussels at which Greece and approval of some 31 billion euros in aid for Athens will likely top the agenda. Significantly, the hugely unpopular 18.5-billion-euro ($23.6 billion) austerity package runs through to 2016, reflecting Athens' wish that its bailout programme be extended by two years from 2014. If it is to be extended -- and after much opposition from hardline eurozone states, it seems as if it might -- its creditors, the EU, International Monetary Fund and the European Central Bank, have to find some way to cover the cost of the extra two years.At the same time, the IMF is reportedly concerned that Greece's soaring debt burden is simply unsustainable, especially since the Greek economy has shrunk by about a fifth since the crisis first broke and shows no signs of recovery. EU figures Wednesday put Greece's total debt at nearly 190 percent of Gross Domestic Product in 2014, more than three times the EU norm of 60 percent. At that level, Greece can never hope to grow fast enough to repay its debt. German Finance Minister Wolfgang Schaeuble said meanwhile that he did not think a deal on Greece with its international creditors was likely "in the coming weeks. "At the moment I do not see the decisions being taken" to secure a definitive accord with Greece's troika of creditors, Schaeuble said. Greek Prime Minister Antonis Samaras has warned that without the 3l billion euros in aid, his country could go broke on November 16. Wednesday's vote -- won by a thin majority of 153 out of 299 lawmakers -- cost Samaras dear, with seven coalition MPs defecting and he faces another close call on Sunday.