Greece unlikely to get bailout funds before October: source

(BRUSSELS) - International auditors will remain in Athens all of September, a European source said Wednesday, meaning Greece will unlikely get its next instalment of bailout funds before October.

Auditors from Greece's international creditors "will remain in Greece the entire month of September in order to present European finance ministers in October agreed measures, a credible and solid plan for Greece," said the official who asked not to be identified.

A favourable report from the auditors of the so-called troika of the European Union, International Monetary Fund and European Central Bank is key to disburse its part of Greece's next instalment of 31.5 billion euros in rescue funds.

The disbursement had previously been expected in September, already a delay due to a two-month political deadlock caused by back-to-back elections in May and June.

The delay could pose difficulties for the Greek government, which is already expected to resort to issuing fresh short-term debt in order to repay 3.2 billion euros to the ECB on August 20.

Getting a favourable decision from the auditors is not assured.

"Much work remains to be done," said the source.

Greek Finance Minister Yannis Stournaras said Tuesday that the government had yet to identify about a third of 11.5 billion euros ($14.2 billion) in spending cuts programme it needs to make in 2013 and 2014 under its bailout programme.

The creditors are reportedly at odds, with the Wall Street Journal reporting earlier this week that the IMF believes in order for Greece's finances to be sustainable its debt-to-GDP ratio should be brought to down to 100 percent by 2020, instead of the 120 percent under current plans.

The European Commission rejected shifting the target, which would imply that eurozone governments or the ECB accept losses on funds provided to Greece.