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Eurozone - Greece

Decision on Greek bailout delayed until mid-October

Reuters/François Lenoir

Eurozone finance ministers have delayed a decision on giving Greece the next instalment of bailout cash after seven hours of talks between eurozone finance ministers on Monday in Luxembourg. The move follows the announcement by Athens on Sunday that it would miss this year's deficit-cutting target. 

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A decision on the next eight-billion-euro tranche of bailout cash is not likely before an EU summit in mid-October.

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Eurozone chief Jean-Claude Junckers said auditors now want a three-year rewrite of Athens spending plans which means Greece will have to agree additional deficit reduction measures.

Some governments are worrying about how much they will have to give their banks in the event of a Greek default.

But Greek Finance Minister Evengelos Venizelos has complained Athens was being made a scapegoat for wider eurozone debt troubles. He blamed the country's woes on a cumulative recession over the past three years that has seen its economy lose 12 per cent of its value.

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Meanwhile, European stock markets and the euro fell sharply for a second day running on Tuesday on rising fears that the Greek debt crisis may trigger a fresh banking disaster and global economic downturn.

The Frankfurt, Paris and Madrid markets were down more than three per cent early on and the euro struck a near nine-month low against the dollar and 10-year nadir versus the yen on worries for the future of the single currency.

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