Euro zone rebuffs Spanish talk of new Greek bailout

Wed Mar 4, 2015 12:14pm EST
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By Andrés González and Philip Blenkinsop

BARCELONA/BRUSSELS (Reuters) - Germany and the European Commission slapped down talk of a third financial rescue for Greece as premature, after Spain once again suggested on Wednesday that a new aid package for Athens was almost inevitable.

Athens, which says it does not need a new aid program, averted a new crisis on Wednesday by successfully raising over 1 billion euros in short-term debt as planned but its long-term funding outlook appears increasingly uncertain.

The country has secured a four-month extension to its bailout program until the end of June but remains shut out of debt markets and its new leftwing government has angered euro zone partners with its sharp anti-bailout rhetoric.

For the second time this week, Spanish Economy Minister Luis de Guindos said Athens was unlikely to be able to return to capital markets by June, and that a package of between 30 and 50 billion euros ($33-56 billion) would be needed.

"If Greece does not recover market access by June ... we will have to establish some other type of agreement with Greece, call it a pact, a deal, a program," de Guindos told a conference in Barcelona. "We have given ourselves these four months to, one, see what the real situation is, to see how Greece has met conditions and to try and establish what happens next (...), which is fundamentally a third rescue."

He was swiftly rebuffed by German Chancellor Angela Merkel, who said she was focusing on the current bailout.

"I think we now have all our hands full to make this succeed and that's what I'm concentrating on," she said when asked about a third package at a news conference with European Commission President Jean-Claude Juncker in Brussels.

A German finance ministry spokesman also said no discussion of a third Greek aid program was on the agenda for Monday's Eurogroup meeting, while European Commission chief Juncker agreed with Merkel on keeping the focus on implementing the extension to Greece's bailout agreed last month.   Continued...

German Chancellor Angela Merkel (L) speaks at a joint news conference with European Commission President Jean-Claude Juncker at the EC headquarters in Brussels March 4, 2015.   REUTERS/Yves Herman