Britain rules itself out of new Greek bailout

Britain has attempted to rule itself out of taking part in any new loan assistance to Greece but Chancellor George Osborne has admitted that it is likely Athens will need more help next year.

Finance Minister George Papaconstantinou admitted this weekend that Greece is examining various ways in which to ease its debt burden, including the possibility of the European Financial Stability Facility buying its bonds, as it looks unlikely that Athens will be able to access international markets next year.

“The markets continue to disbelieve in our country,» he said. «We have to plan our next steps for 2012, for 2013.»

Several EU finance minister, including Papaconstantinou, discussed in Luxembourg on Friday the possibility that Greece would be unable to meet its financial commitments next year.

The British chancellor said that a Greek default is not a foregone conclusion but it is certain that some change to the Greek package would be needed.

“I certainly don’t think it’s inevitable that Greece is going to default,» Osborne told the BBC on Sunday.

“I think it’s inevitable that we are going to look at the Greek package and see what they can do to get through next year but that might involve additional assistance from, for example, the euro zone.”

Osborne admitted markets were skeptical about Greece’s ability to refinance maturing debt, something that had been assumed when international lenders first agreed to help Greece last year.

“The market is quite sceptical about that happening and I suspect a lot of my time over the next few weeks is going to be with other European finance ministers talking about how we try to help the Greeks get through this situation,» he said.

He said he did not want Britain to be part of any further bailout of Greece, and was a «reluctant participant» in the EU-IMF bailout of Portugal.

“I didn’t sign up to that approach. It was something signed up to by my predecessor,» he said.

“We certainly don’t want to be part of any bailout of Greece, a second bailout of Greece.”

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.