Eurozone finance ministers met on Monday to discuss the situation in Greece and reform of the temporary rescue fund in a bid to contain spill-over of the sovereign debt crisis.

 

A joint mission from the troika, namely the European Commission, the European Central Bank and the International Monetary Fund, is in Athens now to assess the situation in Greece and whether to deliver the next tranche of loans to the debt-laden country.

The Greek government has said that if it doesn't receive the 8 billion euros by mid-October it could go bankrupt.

"We are currently assessing whether Greece will meet its fiscal targets with the current measures," Rehn said before the meeting, adding "it seems that Greece is likely to miss the target."

The ministers will not make a decision on whether to pay the sixth tranche of loans to Greece before the troika makes an assessment of the Greek situation, but the worsening debt crisis of Athens will surely dominate their meeting on Monday night.

German Finance Ministers Wolfgang Schaeuble said on arrival for the meeting that speculating about payment of the loans to Greece made no sense.

Besides Greece, the ministers are also discussing reform of the European Financial Stability Facility (EFSF), which analysts said was hard to cover the cost of bailing out larger economies such as Italy and Spain should the sovereign debt crisis spreads.

It was reported that European officials are thinking of increasing the capacity of the EFSF to about 2 trillion euros through leveraging of the EFSF.

Finnish Finance ministers Jutta Urpilainen said that the ministers will discuss leveraging of the rescue fund but he said "we don't want to increase the capacity of the EFSF."

"We will talk about the implementation of the EFSF reform," Schaeuble said, but he insisted that only 10 percent of the EFSF has been tapped and there is no point in speculating now.

The eurozone is under great pressure to prevent the crisis from spreading to bigger economies since turbulence on the financial market is threatening to hamper economic growth of the 17-member bloc.

European Commissioner for Economic and Monetary Affairs Olli Rehn said: "We have a very important meeting at a critical juncture today. We are facing three main challenges: stalling growth, stressed sovereigns and still vulnerable banks."

VietNamNet/Xinhuanet