EU postpones decision on rescue package for Greece

Amid growing political unrest in Greece and escalating protests against the government''s austerity measures, the European Union has postponed a decision on a second multi-billion euro rescue package for the debt-ridden nation at least until mid-July.

However, the European Commission, the executive arm of the 27-nation EU, said on Thursday that a bankruptcy will be averted by releasing the fifth tranche of 12 billion euros from last year''s bailout package of 110 billion euros (USD 159 billion) when euro zone finance ministers meet in Luxembourg over the weekend.

This will help prevent Greece defaulting on its debt repayments due next month and ensure that it will remain solvent until September, EU Commissioner for Monetary Affairs Olli Rehn said.

He proposed that the euro zone nations decide on a second rescue package for Greece at the meeting of their finance ministers on July 11.

"Thereby, we can avoid a credit default scenario and clear the way for a medium-term strategy," he said in a press statement in Brussels.

He called upon the euro zone finance ministers to overcome their "remaining differences and to reach a responsible agreement at this critical juncture."

The EU decision came as Greece's embattled Prime Minister George Papandreou struggled to form a new Cabinet and to win Parliament's support for new austerity measures, which sparked strikes and protests. .