Talks between Greece and its international lenders on a new aid tranche were put on hold on Friday after disagreement over why Athens has fallen behind schedule in cutting its budget deficit and what it must do to catch up.
The unplanned early departure of the EU, IMF and ECB inspectors showed tension between Athens and its lenders over how to implement reforms and pull the country out of a severe debt crisis amidst a deep recession.
Greece blames a deeper-than-expected contraction -- which it sees possibly reaching 5 percent of gross domestic product this year -- for its failure to meet deficit targets, while its lenders mostly point at delays in implementing reforms.
This is not the first time that an inspection of the debt-choked country takes longer than expected and analysts and Greek officials said they believed the next, 8 billion euro tranche of aid was not at risk.
Athens has no benchmark bond maturing in September and is in no immediate danger of bankruptcy even if it did not get the aid this month.
Finance Minister Evangelos Venizelos said the talks would resume on Sept 14, after experts had had a chance to do more technical work and make preparations for the 2012 budget.
"These 10 days are absolutely essential both for us and the (EU/IMF/ECB) troika in order to work on the data on a technical level and prepare the tables on which the draft budget will be based," he told a news conference.
The EU and the IMF, which launched a 110 billion euro, multi-year bailout of Greece in May last year, are likely to go to great lengths to avoid cutting Athens off from aid, for fear of the impact on financial markets and other countries in the euro zone.
