BRUSSELS — Greece's international creditors failed to agree Monday on how to get the country's bailout program back on track and put off again the release of the next batch of loans that Athens is using to pay its day-to-day bills.
However, European finance ministers meeting in Brussels did decide to give Greece two extra years, until 2016, to reform its economy — one of the conditions of its bailout package. But they could not agree on how to pay for the extension or when the country's debts would reach a manageable level.
"Today a huge step has been made in order to secure the program on Greece, in order to enhance the confidence in the eurozone, in order to find a strong and definite solution for this question, which has lasted for more than two years now," said French Finance Minister Pierre Moscovici as he left the meeting of finance ministers from the 17 countries that use the euro. "We couldn't do more today."
The European Central Bank, the International Monetary Fund and the European Commission, which is the European Union's executive arm, have twice agreed to bail out Greece, pledging a total of about $305 billion in rescue loans. The country has received about $191 billion of those loans so far, in exchange for making tough budget cuts and sweeping reforms to its labor market and bureaucracy.
The main aim of the bailout program is to right Greece's economy and get it to a point where it no longer relies on international aid and can independently raise money on the debt markets. The bailout program was supposed to steadily reduce Greece's debt until, in 2020, it reached 120 percent of its annual gross domestic product — a level generally considered sustainable. But it's been clear for months now that the country is way off track from achieving that goal.
The question of debt sustainability is as important as it is divisive: If Greece's debts can't be reduced to a level at which the country can pay them down, then the billions of euros in bailout loans given to Greece will have been wasted.
It has taken on even more importance in recent weeks because Germany has insisted that until the question is resolved, Greece can't receive its next $40 billion batch of bailout loans.
The issue appears to have ultimately derailed Monday's meeting, and so the ministers will meet again Nov. 20 to release the next batch of bailout loans.
Still, politicians sought to spin the meeting as having made some progress, especially after Greece pushed two tough bills through its parliament in recent days — one with a raft of reforms, the other with a stringent 2013 budget.
Greece has struggled to keep up with the demanding pace of reforms set out in its rescue package and has asked its creditors for more time.
The ministers agreed to relax the pace, extending the time line from 2014 to 2016, but declined to answer the more important question of how that extra time will be paid for. The extension still needs formal approval.