Eurozone Considers Stiffing Greece on Bailout

Officials trying to hold back $6.7B payout amid political upheaval
By Kevin Spak,  Newser Staff
Posted May 9, 2012 1:00 PM CDT
Eurozone Considers Stiffing Greece on Bailout
This Tuesday, Feb. 14, 2012 file photo, shows a worker cleaning a sign for the Bank of Greece from red and black paint, after Sunday's riots, in Athens.   (AP Photo/Thanassis Stavrakis)

Eurozone officials are considering holding back a $6.7 billion bailout payment to Greece—a payment it dearly needs to pay the $4.3 billion in bonds coming due next week, sources tell the Wall Street Journal. The chatter comes in response to Greece's recent elections, which swept the country's two main parties out of power in favor of formerly fringe groups that oppose the bailout.

That means it's far from certain, given Greece's current political climate, whether it will follow through on its end of the deal with creditors, so some officials are reluctant to drop the check in the mail just yet. But since the tranche has already been agreed to, they may not be able to back out. "The problem is, how much freedom do you have, legally speaking?" one official asks. Talks to form a coalition government are still deadlocked, the AP reports. PASOK chief Evangelos Venizelos says nothing came of his talks today with Radical Left Coalition leader Alexis Tsipras. (More Greece stories.)

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