News / Economy

ECB, Germany Play Down Talk of Third Greek Bailout

European Central Bank (ECB) executive board member Joerg Asmussen (R) addresses reporters next to Greece's Finance Minister Yannis Stournaras during a news conference in Athens, Aug. 21, 2013.
European Central Bank (ECB) executive board member Joerg Asmussen (R) addresses reporters next to Greece's Finance Minister Yannis Stournaras during a news conference in Athens, Aug. 21, 2013.
Reuters
The European Central Bank joined Germany on Wednesday in playing down talk of a third bailout package for Greece, but reaffirmed the eurozone would help the country trim debt as long as it stuck to its latest aid program.

Speaking in Athens a day after German Finance Minister Wolfgang Schaeuble bluntly predicted Greece would need a new bailout, ECB executive board member Joerg Asmussen said he had not discussed the issue at talks with senior Greek officials.

He referred instead to the eurozone's pledge last year to support Greece until it can tap markets again, provided it sticks to its current bailout obligations and posts a budget surplus before interest payments.

“This is a decision taken in November last year, it is public knowledge, and there's nothing new and there's nothing to add,” he said. “If we look at how things unfold, we will know not before spring next year if the country has reached a primary surplus on an annual basis.”

In Berlin, German officials sought to distance themselves from Schaeuble's comments, which broke a pre-election taboo by describing a new rescue as inevitable.

Greece has already been bailed out twice since 2010 with 240 billion euros worth of agreements coordinated by the ECB, European Union and International Monetary Fund.

It had been expected to seek some form of additional debt relief sooner or later to bring its massive debt down to a manageable level, but the openness of Schaeuble's statement that there would need to be a third bailout for Athens came as a surprise.

Germany's finance ministry said the eurozone would take a fresh look at Greece's aid program in mid-2014 and that Berlin was not aware of any discussions on how to structure a new rescue package.

“We have reached the middle of the current program. It is August 2013, we will certainly have to look in mid-2014 at where we are, what the conditions are and whether the program has been fulfilled,” said spokesman Martin Kotthaus.

Schaeuble's boss, Chancellor Angela Merkel, in her first comments on Greece since his comments, stuck to her line that it was too early to discuss another package, or to speculate how large it could be.

“I can't say today what kind of sums might be necessary,” she told broadcaster Sat.1. “Only in the middle of next year will we be able to say.”

A Greek finance ministry official speaking to Reuters on condition of anonymity said any further help for Greece would aim to cover its funding shortfall in 2014-2016 and would be much smaller than the previous aid packages, given the country's limited funding needs for the period.

The International Monetary Fund has put Greece's uncovered funding needs for 2014-2015 at 10.9 billion euros.

At least part of that stems from national European central banks refusing to roll over some Greek bonds they hold, as well as a potential shortfalls in tax and privatization revenues and Greece being unlikely to fully return to bond markets next year.

Such estimates are revised frequently and are highly sensitive to budget and economic growth projections, which Greece's lenders are expected to update in the fall.

Greek 'debt colony'

Schaeuble's comments were immediately seized on by Greece's anti-bailout opposition, who fear that any new aid will be accompanied with yet another round of painful austerity.

“Schaeuble threatens with new help,” leftist newspaper Efimerida ton Syntakton deadpanned on its front page, next to a stern-looking image of Schaeuble with tightly pursed lips.

“They admit they failed and now they want to save us again,” the newspaper said.

Panos Skourletis, spokesman for the Syriza opposition party, said “Contrary to recent talks about an eventual debt writedown, we are going down the same old road, the same recipe, which inflates debt and turns Greece into a debt colony.”

Syriza shocked established parties in the last two elections by riding a wave of public anger at austerity to become the country's second largest party.

Greek officials have suggested any funding shortfall could be covered with a combination of new rescue loans, or debt support measures like extending maturities, cutting interest rates on loans, as already envisaged under a eurozone decision on Greece last year. One official suggested bilateral loans Athens got under its first bailout could also be rolled over.

European Union Monetary Affairs Commissioner Olli Rehn was cited on Wednesday as saying that while new rescue loans in a third bailout were possible, they were not the only option to help Greece and pointed to the option of extending maturities.

The aid program Schaeuble is expecting will be at least partly financed via the EU budget, German newspaper Sueddeutsche Zeitung cited unnamed sources as saying.

Greece's international lenders - the EU, ECB, and IMF, known as the troika - are due to return to Athens in the autumn to reexamine whether Greece's debt is on sustainable footing and whether the government needs to find further savings to meet its 2015-2016 budget targets.

Progress on reform in the recession-stricken country has been patchy. Tax revenues continue to lag targets and the Greek economy has struggled to show signs of recovery after shrinking by about a quarter from its peak six years ago, mainly as a result of austerity policies imposed under two bailouts.

You May Like

Video Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.