Finance minister warns of funding trouble without bailout wrapup

Greece’s finance minister has said the country faces financial trouble after February if it fails to elect a president, prompting the opposition Syriza party to accuse the government of blackmail to win support.

Prime Minister Antonis Samaras has brought forward a presidential election by two months to end political uncertainty but faces an early parliamentary election if his candidate loses. Polls show Syriza would win a snap vote.

Both Samaras and Syriza leader Alexis Tsipras have been trading barbs ahead of the presidential vote starting on Wednesday as they vie for support from parliamentarians who will choose the new head of state.

Greece would face funding problems if a snap election failed to produce a government that can wrap up a pending bailout review due to unlock 7 billion euros in aid, Finance Minister Gikas Hardouvelis told the financial daily Naftemporiki in comments published Monday.

“If there is no government to conclude negotiations, there will be an important funding gap,» he said. «This deficit is manageable until February, and not easily afterwards, since from March onwards our needs will increase.”

He also warned Greece would post lower growth next year if a president was not elected. Greece emerged this year from a six-year recession and the 182-billion-euro economy is expected to expand by 0.6 percent this year and 2.9 percent in 2015.

Later on Monday, Hardouvelis said EU and IMF inspectors are expected to return to Athens early in January and conclude the review before a Jan. 26 meeting of euro zone ministers.

Greece needs to repay IMF loans worth about 2.8 billion euros by the end of March. Its next major funding hurdle comes in July and August when it has to repay over 5 billion euros in maturing debt.

So far Athens has been granted a two-month extension to its bailout to the end of February. A senior aide to Tsipras said on Monday a Syriza government would ask for a further «limited» extension to the program.

“Greece’s funding needs are minor until the summer. There is an issue of negotiating a big ECB bond which matures in the summer,» said aide Nikos Pappas. «Mr. Samaras is afraid… and behaves like a blackmailer.”

The presidential vote will be held over three rounds starting Wednesday and ending on Dec.29. A snap election would be called at the end of January if a president is not elected.