European governments clashed on Tuesday over options to help debt-laden Greece meet a cash crunch in coming weeks while it waits for a tough eurozone bailout deal to be finalised.
Britain, which does not use the euro, has already said it will resist contributing to any bridge financing to get Greece through several huge payments, including 4.2 billion euros ($4.62 billion) owed to the European Central Bank (ECB) on July 20.
"Concerns were raised by several non-euro member states, this is something we will have to take into account," said Valdis Dombrovskis, the EU's vice president for the euro after meeting with European finance ministers.
"Pretty much all options are quite difficult and have political, legal and financial complications," the former Latvian premier said.
British Finance Minister George Osborne rejected any attempt to use an EU-wide emergency fund, the European Financial Stabilisation Mechanism (EFSM), to underwrite bailouts of eurozone countries.
"Britain is not in the euro, so the idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter," Osborne said in Brussels.
Britain -- where the possibility of a "Grexit" from the single currency has been closely watched ahead of a referendum on British membership of the EU by 2017 -- believes that the European bloc in 2010 agreed to no longer tap the fund
German Finance Minister Wolfgang Schaeuble, a hawk, also expressed doubts.
He said the proposal to use the fund, originally made by the European Commission, the EU's executive arm in Brussels, was "not very constructive".
Schaeuble stressed the urgency of the situation, adding that negotiations on finalising the 85-billion-euro bailout would last at least four weeks, leaving Greece in the lurch for now.
"We need to find a solution this week in order to prevent a dramatic situation on Monday," when the ECB payment falls due, Schaeuble said.
- 'Fifteen different options' -
Reports said that France as well as the Commission were pushing to turn to the fund, where a decision would only require a weighted majority of member states.
An EU source said that using the EFSM remained one of the "most feasible options" to help Greece survive the cash crunch and urged Britain to give ground on the issue.
Bilateral loans are another option that have been raised, with eurozone officials saying France was a possible donor, but like the others, that would pose difficulties, ministers said.
"To be frank, people weren't rushing forward" with offers of one-on-one loans, Schaeuble said wryly.
The situation is complex, with Finnish Finance Minister Alex Stubb saying six different options were being studied, while an EU official saying that there were 15.
Greece's creditors estimate it will need a total of 12 billion euros until mid-August to stay afloat. The ECB loan on Monday is particularly crucial because a default would force Frankfurt to cut off emergency loans keeping Greek banks afloat.
Greece already on Monday missed a second debt payment to the International Monetary Fund in two weeks, bringing the country's arrears to the IMF to 2.0 billion euros, an unprecedented embarrassment for a developed nation.
In another option that would certainly prove to be controversial, Schaeuble proposed that Greece issue IOU's to pay pensions and other domestic bills, thereby saving its scarce euros for debt payments.
But the creation of IOU's is also seen as a first step towards the return of the Greek drachma, and risks rekindling talk of Grexit that Monday's bailout deal was supposed to have buried.
Other options include transferring 3.5 billion euros in profits on Greek bonds held by the ECB.
European governments clashed on Tuesday over options to help debt-laden Greece meet a cash crunch in coming weeks while it waits for a tough eurozone bailout deal to be finalised.
Britain, which does not use the euro, has already said it will resist contributing to any bridge financing to get Greece through several huge payments, including 4.2 billion euros ($4.62 billion) owed to the European Central Bank (ECB) on July 20.
“Concerns were raised by several non-euro member states, this is something we will have to take into account,” said Valdis Dombrovskis, the EU’s vice president for the euro after meeting with European finance ministers.
“Pretty much all options are quite difficult and have political, legal and financial complications,” the former Latvian premier said.
British Finance Minister George Osborne rejected any attempt to use an EU-wide emergency fund, the European Financial Stabilisation Mechanism (EFSM), to underwrite bailouts of eurozone countries.
“Britain is not in the euro, so the idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter,” Osborne said in Brussels.
Britain — where the possibility of a “Grexit” from the single currency has been closely watched ahead of a referendum on British membership of the EU by 2017 — believes that the European bloc in 2010 agreed to no longer tap the fund
German Finance Minister Wolfgang Schaeuble, a hawk, also expressed doubts.
He said the proposal to use the fund, originally made by the European Commission, the EU’s executive arm in Brussels, was “not very constructive”.
Schaeuble stressed the urgency of the situation, adding that negotiations on finalising the 85-billion-euro bailout would last at least four weeks, leaving Greece in the lurch for now.
“We need to find a solution this week in order to prevent a dramatic situation on Monday,” when the ECB payment falls due, Schaeuble said.
– ‘Fifteen different options’ –
Reports said that France as well as the Commission were pushing to turn to the fund, where a decision would only require a weighted majority of member states.
An EU source said that using the EFSM remained one of the “most feasible options” to help Greece survive the cash crunch and urged Britain to give ground on the issue.
Bilateral loans are another option that have been raised, with eurozone officials saying France was a possible donor, but like the others, that would pose difficulties, ministers said.
“To be frank, people weren’t rushing forward” with offers of one-on-one loans, Schaeuble said wryly.
The situation is complex, with Finnish Finance Minister Alex Stubb saying six different options were being studied, while an EU official saying that there were 15.
Greece’s creditors estimate it will need a total of 12 billion euros until mid-August to stay afloat. The ECB loan on Monday is particularly crucial because a default would force Frankfurt to cut off emergency loans keeping Greek banks afloat.
Greece already on Monday missed a second debt payment to the International Monetary Fund in two weeks, bringing the country’s arrears to the IMF to 2.0 billion euros, an unprecedented embarrassment for a developed nation.
In another option that would certainly prove to be controversial, Schaeuble proposed that Greece issue IOU’s to pay pensions and other domestic bills, thereby saving its scarce euros for debt payments.
But the creation of IOU’s is also seen as a first step towards the return of the Greek drachma, and risks rekindling talk of Grexit that Monday’s bailout deal was supposed to have buried.
Other options include transferring 3.5 billion euros in profits on Greek bonds held by the ECB.
