The European Union has delayed a major loan to Greece pending the outcome of the coalition-government talks. The E.U. says it will proceed with a $5.4 billion loan today, but will delay the disbursement of over $1.2 billion until Monday. In Brussels, E.U. Commission President José Manuel Barroso said Greece faces a cutoff of aid and other penalties if the austerity deal isn’t met.

José Manuel Barroso: “There is an agreement between Greece and the euro area, all the euro area member states and European institutions. Greece has to respect this agreement, as the other countries have to respect this agreement. It’s a question of credibility not only for Greece, but for the euro area as a whole. And this is very important to understand, that if this agreement is not respected, it will be very negative for Greece.”