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Troika's Greek report out after US vote

Friday, September 21 14:53:26

An EU-IMF report into whether Greece's debt is manageable looks set to be delayed until after Nov. 6 because policymakers want to avoid any shock to the global economy before the U.S. election, EU officials and diplomats say.

The report by the 'troika' of Greece's foreign lenders -- the European Commission, European Central Bank and International Monetary Fund -- was expected during October, possibly before a meeting of eurozone finance ministers on Oct. 8.

The study provides the basis for decisions on whether to disburse the next tranche of aid to Athens, which may otherwise run out of money to pay wages and pensions, default on its debt and perhaps be forced to leave the euro area.

Differences inside the troika about the precise extent of Greece's debt problems, combined with political pressure to hold off for another few weeks, look likely to mean a delay until mid-November. In the meantime, Greece will be kept afloat by issuing short-term treasury bills and its banks will get access to emergency funds from the Greek central bank. "The Obama administration doesn't want anything on a macroeconomic scale that is going to rock the global economy before Nov. 6," a senior EU official told Reuters, adding that previous troika reports had also slipped.

Several sources in Germany said top officials in Washington had made clear in numerous conversations with their German and European counterparts that they would prefer no surprises before the tightly contested election.

Most polls show President Barack Obama leading his Republican rival Mitt Romney, but voters remain sensitive to any event that could damage U.S. economic growth and hurt jobs. "It's likely the troika report will be pushed back beyond the U.S. election date," said a Berlin official who spoke on condition of anonymity. Asked if that was a special request from Washington, he replied: "They don't want any surprises."

The European Commission's spokesman on finance said on Friday the troika would take a week-long break from its work in Athens, the second time it has interrupted its mission since it began in late July, adding to expectations of a delay.

"The inspectors are expected to return to Athens in about a week," spokesman Simon O'Connor told reporters.

"As for a conclusion of the mission, I don't have any dates to share with you," he said, adding that it should be some time during October. "We can't say exactly when." (C ) Reuters