ECB and Germany play down talk of third Greek bailout

Wed Aug 21, 2013 1:14pm EDT
 
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By Lefteris Papadimas and George Georgiopoulos

ATHENS (Reuters) - The European Central Bank joined Germany on Wednesday in playing down talk of a third bailout package for Greece, but reaffirmed the euro zone 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 euro zone'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 euro zone 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.   Continued...

 
A tourist takes pictures in front of the Parthenon temple at the Acropolis hill in Athens August 19, 2013. REUTERS/John Kolesidis