Greece facing further obstacles to bailout deal

BRUSSELS, Belgium - Greece faces further hurdles and delays before it can receive a second, $171 billion, bailout, even though its lawmakers approved more austerity measures in the face of violent protests.

European Union Economic Affairs Commissioner Olli Rehn on Monday called the Greek parliament's approval of a further round of budget cuts a "crucial step forward," but Germany insisted a second bailout would be some time in coming.

Germany, which as Europe's biggest economy pays the largest share of bailout deals, said it wouldn't give its final approval for new aid payments until early March - after it becomes clear how many banks and investment funds are willing to take losses on their Greek bonds and the parliament in Berlin votes on the new measures.

Pushing the new bailout back for several weeks underlines the amount of distrust that has built up against Greece over the last two years, when many promised cuts and reforms were passed in its parliament but never actually implemented.

But it also means that Greece, its citizens, and the rest of the world economy won't know for several weeks whether the country can avoid a potentially disastrous default. Bankruptcy could force Greece out of Europe's euro currency union, drag down other troubled eurozone countries, and further roil global markets.

"Germany is trying to get the best deal it can by putting pressure on Greece now," said Ben May, European economist at Capital Economics in London. The idea is to "give Greece a bit more of an incentive over the next few weeks to speed things up."

But delaying the final approval of the bailout is not without risk. Uncertainty over the rescue money could dissuade some of Greece's private investors from participating in a separate bond swap deal, May warned. A hitch in getting the bailout package through national parliaments in the eurozone could also push Greece perilously close to missing a 14.5 billion bond redemption on March 20, he added.

German Finance Minister Wolfgang Schaeuble stressed that Europe was doing everything to help Greece avoid bankruptcy, "but Greece itself, of course, must want that." He told German public broadcaster ZDF that if Greece were to default on its debt, Europe "is better prepared now than two years ago."