Eurozone presses Greece to live up to promises

Eurozone finance ministers are to meet to press the new Greek coalition government to roll out tough austerity measures Eurozone finance ministers meet Monday to press the future Greek coalition government to roll out tough austerity measures in return for new aid the nation needs to avoid default. The talks in Brussels follow a dramatic deal in Athens late Sunday, with Prime Minister George Papandreou agreeing to step down to make way for a national unity government expected to ratify a crucial debt rescue package.
The eurozone is holding back eight billion euros ($11 billion) in loans from an existing 110-billion-euro bailout until Athens clearly commits to the massive debt reduction deal that was agreed in late October.
Greece needs the cash by mid-December to stay afloat, but European leaders want Athens to show it will fulfill its end of the bargain after Papandreou stunned partners with a short-lived bid to put the deal to a referendum.
"The Greeks must prove that they will really fulfill the conditions," Belgian Prime Minister Yves Leterme told RTBF television on Sunday.
Papandreou and opposition chief Antonis Samaras were to hold new talks on Monday to find a new prime minister who will head a coalition expected to ratify the rescue package and then lead the country to elections.
The eurozone rescue deal includes 100 billion euros in new loans for Greece and a debt reduction scheme with banks, which agreed to lose 50 percent of their bond holdings to cut Greece's debt by 100 billion euros.
But the political wrangling in Athens endangered the deal, angering European leaders who told Greece that it must now choose between leaving or staying in the eurozone.
With fears mounting that Italy could be the next domino to fall in the crisis, eurozone ministers are also in a hurry to beef up the firepower of the bloc's bailout fund, the European Financial Stability Facility (EFSF).
Eurozone leaders have agreed to boost the EFSF by "leveraging" its capacity from 440 billion to one trillion euros, via a debt insurance scheme.
"Initially the idea was for the (European Financial Stability Facility) to be ready by the end of the year, but we want to accelerate the work because of the market uncertainty and the situation in Greece," an EU official said.
The eurozone also hopes to convince emerging powers such as China to come to its aid, possibly through the IMF, which is sending officials to Monday's talks.
Italy, the eurozone's third economy, has worried European leaders as its borrowing costs have soared over six percent, near levels that forced Greece, Ireland and Portugal to take EU-IMF bailouts.
Prime Minister Silvio Berlusconi accepted to have IMF officials join the European Commission in overseeing the country's implementation of measures needed to cut its 1.9-trillion-euro debt.