Well, this isn’t good news for Greece, especially as they have to reduce that budget deficit before they can get the next tranche of cash that has been promised to them.

According to preliminary estimates by the so-called troika (made up of the European Commission, European Central Bank and International Monetary Fund), the Greek government’s budget deficit is bigger than expected and currently amounts to €20 billion – almost double previous estimates.

Prime Minister Antonis Samaras has asked public-sector creditors to forgive some debt.

Spiegel has the latest on the Greek woes:

Prime Minister Antonis Samaras is also hoping that lenders will give his government two years longer to fulfill his austerity program. In that case, Greece would probably require an additional €20 billion in aid.

Meanwhile a row has erupted between the German government and the European Commission over when the decision will be taken on whether Greece will get any fresh money at all.

The Commission wants a decision to be reached at the next EU summit on October 18-19. But Berlin says there won’t be reliable figures available until November at the earliest.

Officials said on Friday that Greece and the troika had made progress in negotiations on an austerity package, but had failed to reach a deal at the last meeting before visiting inspectors from the troika left Athens last weekend.

The talks are due to resume in a week when the troika inspectors return to Athens. So far, Greek officials have said agreement on €9,5 billion of the €11,5 billion package of spending cuts had been reached. That includes cuts to wages, pensions and benefit payments and savings planned from an increase in the retirement age.

Basically, Greece, which is almost bankrupt, needs the troika’s approval on the spending cuts to ensure the release of the next tranche of aid. But without that money, it will have to default, which means that the debate as to whether Greece should leave the euro zone must soldier on.

[Source: Speigel]