Tuesday April 28, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Eurozone not preparing third Greek bailout so far, says official

BY Jan Strupczewski & Martin Santa

The eurozone is not making any preparations for a third bailout for Greece and will consider it only if expressly asked by Athens, which has not happened so far, a senior eurozone official said on Thursday.

Instead, the euro zone is now focusing on the timing and size of disbursements of badly delayed tranches of loans that have already been promised under the first two rescue packages, the official, directly involved in the Greek bailouts said.

Euro zone countries have come up with aid of 240 billion euros for Greece to help it reform and put its public finances back in order after since the country was cut off from markets in 2010 because its public finances have spun out of control.

The second eurozone bailout programme for Greece expires at the end of this year. Yet with an inverted yield curve and a 10-year borrowing cost still at around 6.8 percent, Athens can hardly hope to sustainably finance itself on the market.

In February, German media reported that Berlin was preparing for the possibility that the euro zone would have to support Greece with an extra 10 billion to 20 billion euros.

But asked if any plans were being made to help Greece finance itself in 2015 and 2016, the official said:

"Within our circles there has been absolutely no discussion of that, programme for now is up until end-2014."

The International Monetary Fund, which also lends to Greece, has a financing programme running until the first quarter of 2016. The catch is that the IMF will not disburse its money unless Greek financing needs are fully covered during that period, either by the eurozone or markets.

"The Fund (IMF) will require assurance by its European partners that if so required, financing would be available. And I have no reason to doubt that such assurances, if asked, would be given," the official said.

Euro zone finance ministers will meet on Tuesday in Athens to discuss the timetable and size of loan disbursements that Greece should get under the existing programme, after the initial schedule was derailed by six months of negotiations over what the country must do to get the money.

Greece needs 9.3 billion euros to pay for its bonds maturing in May, and the official said the first tranche of the loans that eurozone ministers will discuss on Tuesday will certainly cover such needs.

"Of course the disbursements will be made in a volume and timing that makes sure redemptions are fully insured," he said.

"The ministers will be discussing amounts and we have no firm data on that yet, but I expect it to be in the very low double-digit range or in the high single-digit range," the official said.

There might be one or two more tranches of loans to Greece after that in the next three months, the official said.

Greece said on Wednesday it was almost ready to return to the bond markets after a four-year absence and that any bond sale would probably take place after European Union elections in May.

The government, which planned a return to markets in the second half of this year, has been encouraged by falling bond yields to consider a quicker return, although a final decision has not been taken.

"I cannot judge, quite frankly, what the discussions of the Greek authorities are when they look at market rates and may feel compelled or free to start building up a yield curve through successive bond placements," the official said.

"Which they may possibly, given the environment, be starting in the not-too-distant future," he said.

Investors have become more enthusiastic about buying bonds of eurozone countries, driving down yields of all countries that needed eurozone bailouts - Greece, Ireland, Portugal, Cyprus and Spain.

"There is at present, for all programme countries of our macro-assistance programmes, a very, very favourable environment in terms of financing conditions. For sure everybody will be availing themselves of this very, very favourable environment," the official said.

"Will this be done in a such a volume that they (Greece) can immediately wave 'Goodbye' to us, that depends on the specificities of their market access. But the situation is good, he said.

Given that Greece was already running a primary surplus, which means there is money in the budget before it has to pay debt servicing costs, the amounts that Athens would have to borrow would be very small.

"It is for the Greek authorities to analyse the situation very carefully, which will probably be done once we've got the final view on our disbursement schedule and then have a intense discussion with the debt manager and see what's going to happen," the official said.

"If there ever were to be an extension of the programme (a third bailout) it's for them (Athens) to say: 'We think we would want it', and not for us to say: 'We think you should'."

[Reuters]

ekathimerini.com , Friday March 28, 2014 (09:24)  
Local retailers bracing for yet another Sunday battle
Supermarket sector sees turnover decline and more concentration
Athens tourism should grow unless stability is threatened
Reuters poll: 40 pct chance of a Greek eurozone exit
Erdogan raps new Turkish Cypriot leader
Turkish President Recep Tayyip Erdogan became embroiled with a war of words with the newly elected leader of northern Cyprus on Monday, bluntly telling him he should be careful what says. Mu...
University rectors and mayors stall over cash
As the government scrambles to raise the cash to cover its pending obligations in the coming months, it remained unclear on Monday whether university rectors and local authorities would comp...
Inside News
BASKETBALL
Rethymno defeats in-form AEK on Crete
AGO Rethymnou put an end to a positive string of results for in-form AEK, while PAOK survived a strong challenge by Kolossos Rhodes in Thessaloniki in yet another exciting weekend of basketb...
SOCCER
Panathinaikos beats Xanthi to rise to second
Panathinaikos jumped back up to the second spot of the Super League after its home win over Xanthi on Saturday, as PAOK slumped to third due to its draw at home with PAS Giannina on Sunday. ...
Inside Sports
ANALYSIS
If Greece falls, no one wants their prints on the murder weapon
"We're going bust." "No, you're not." "You're strangling us." "No we're not." "You owe us for World War Two." "We gave already." The game of chicken between Greece and its international cred...
COMMENTARY
Reaching crunch time
Several cabinet ministers and MPs are no longer hiding it: They either openly admit that they are promoting the drachma or they murmur things like, Why not the drachma? Some go even furthe...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Rethymno defeats in-form AEK on Crete
2. Local retailers bracing for yet another Sunday battle
3. Supermarket sector sees turnover decline and more concentration
4. Athens tourism should grow unless stability is threatened
5. Erdogan raps new Turkish Cypriot leader
6. Reuters poll: 40 pct chance of a Greek eurozone exit
more news
Today
This Week
1. Greeces day of reckoning inches closer as debt payments loom
2. Tsipras reshuffles negotiating team after Riga debacle
3. Pensions will not be cut, insists social insurance chief
4. Berlin silent on content of Merkel-Tsipras chat amid claims of 'dramatic' situation
5. Anastasiades, Akinci speak and look towards fresh push in peace talks
6. ECB seen going all the way on QE as economists doubt taper
Today
This Week
1. Greek government's popularity takes a hit as talks drag on
2. Europe's collision course with Greece
3. Denialism
4. It's up to the Greek government to ensure deal with lenders, says ECB's Coeure
5. Leaving the past in the past
6. Varoufakis warns of Grexit contagion
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2015, H KAΘHMEPINH All Rights Reserved.