Inspectors back €8bn rescue for Greece... at last

The "troika" of inspectors who are administering the Greek bailout yesterday said they had agreed to release the funds that Athens needs to avoid defaulting on its debts.

The representatives of the European Union, the European Central Bank and the International Monetary Fund said the Greek government had done enough to justify the release of the latest €8bn (£7bn) payment. The officials said in a statement: "The next tranche of €8bn will become available, most likely, in early November."

They warned, however, that the Greek government's efforts to sort out the country's public finances had been patchy and that the administration of George Papandreou, the Prime Minister, still needed to step up its efforts. They said: "As overall progress has been uneven, a reinvigoration of reforms remains the overarching challenge facing the authorities." The officials also urged the Greek government to "put more emphasis on structural reforms in the public sector and the economy more broadly".

Despite the troika's broadly positive verdict, the German government said it had yet to make up its mind whether to approve the paymentof funds to Athens. A German Finance Ministry spokesman said: "We'll wait and look at the report, analyse it and then decide what will happen."

The statement on Greece coincided with a political crisis in Slovakia, the only one of 17 eurozone nations that has yet to ratify the extension of the powers of the €440bn European Financial Stability Facility (EFSF).

The Slovakian Prime Minister, Iveta Radicova, is facing a rebellion from her junior coalition partner, the Freedom and Solidarity Party, which opposes the legislation to beef up the bailout fund. Without ratification from all 17 eurozone parliaments, the European bailout fund cannot start to exercise its new powers, which include buying up the sovereign bonds of member states and recapitalising banks.