Euro zone not preparing third Greek bailout so far: official

Thu Mar 27, 2014 6:45pm EDT
 
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By Jan Strupczewski and Martin Santa

BRUSSELS (Reuters) - The euro zone is not making any preparations for a third bailout for Greece and will consider it only if expressly asked by Athens, which has not happened so far, a senior euro zone official said on Thursday.

Instead, the euro zone is now focusing on the timing and size of disbursements of badly delayed tranches of loans that have already been promised under the first two rescue packages, the official, directly involved in the Greek bailouts said.

Euro zone countries have come up with aid of 240 billion euros for Greece to help it reform and put its public finances back in order after since the country was cut off from markets in 2010 because its public finances have spun out of control.

The second euro zone bailout program for Greece expires at the end of this year. Yet with an inverted yield curve and a 10-year borrowing cost still at around 6.8 percent, Athens can hardly hope to sustainably finance itself on the market.

In February, German media reported that Berlin was preparing for the possibility that the euro zone would have to support Greece with an extra 10 billion to 20 billion euros.

But asked if any plans were being made to help Greece finance itself in 2015 and 2016, the official said:

"Within our circles there has been absolutely no discussion of that, program for now is up until end-2014."

The International Monetary Fund, which also lends to Greece, has a financing program running until the first quarter of 2016. The catch is that the IMF will not disburse its money unless Greek financing needs are fully covered during that period, either by the euro zone or markets.   Continued...

 
Greece's Prime Minister Antonis Samaras arrives to address reporters at a news briefing in Athens March 18, 2014. REUTERS/Yorgos Karahalis