Greece signals pullback on early end to bailout
Greece is ready for a “new relationship” with international creditors in 2015, its finance minister said, in a signal it may be abandoning plans which had rattled markets.
Finance Minister Gikas Hardouvelis described the new relationship as an “adjustment period, maybe six months, maybe one year, until we completely exit the memorandum” that has bound the Greek government to undertake certain fiscal policies in exchange for loans needed to keep the government solvent.
“The fact that our creditors also talk about a new relationship signifies that they are open to dialogue, that there is no disagreement about the possibility of a prudent exit,” by Greece from its international bailout program, he said in a televised interview late on Monday.
Greece is set to end the EU-side of its 240 billion euro ($300 billion) rescue plan at the end of the year and embattled Greek Prime Minister Antonis Samaras has made it clear he would like to see the country free itself from all bailout obligations as soon as possible.
The IMF portion of the Greek bailout runs until 2016 and many EU member states, wary of an unsupervised Athens, would like Brussels to stay linked to that program.
The thought of Greece going it alone without some form of international support and oversight has also panicked the markets, sending stock prices in Athens plummeting and Greek interest rates climbing to alarmingly high levels.
However, the politically unpalatable bailout conditions have weakened Samaras’s coalition government, making him even keener to follow Ireland and Portugal in making a clean exit from their bailout programs.
Hardouvelis’s comments followed those by a senior European official on Monday that signaled that the EU was also looking for a compromise.
“It seems that a completely clean exit is highly unlikely and we’ll have to explore other options,” a senior European official said ahead of a Thursday meeting of eurozone finance ministers.
The official did not clarify what form the aid could take but given market volatility in recent weeks, “a structured, contractual relationship between euro area institutions and Greece makes sense.”
Samaras has previously signaled Greece would consider a precautionary credit line from the eurozone’s ESM bailout fund. [AFP]
