August 7, 2015 / 7:37 AM / 2 years ago

German Finance Ministry favors bridge loan for Greece: paper

BERLIN (Reuters) - Germany’s Finance Ministry favors a bridge loan for Greece to give Athens and its creditors sufficient time to negotiate a comprehensive third bailout, the Sueddeutsche Zeitung daily reported on Friday.

A Greek flag flutters in the wind above tourists visiting the archaeological site of the Acropolis hill in Athens, Greece July 26, 2015. REUTERS/Ronen Zvulun

“A program that should last three years and be worth over 80 billion euros needs a really solid basis,” the paper quoted a ministry source as saying. “A further bridge loan is better than just a half-finished program.”

Greece is in negotiations with the European Union and International Monetary Fund for as much as 86 billion euros ($94 billion) in fresh loans to stave off financial ruin and economic collapse.

A 3.5-billion-euro debt payment to the European Central Bank falls due on Aug. 20 and without a bailout deal, Athens would need bridge financing.

The reported German preference for a bridge loan contrasts with the view of Greek Prime Minister Alexis Tsipras and French President Francois Hollande, who said on Thursday a new bailout should be agreed by late August.

Reporting by Caroline Copley; editing by John Stonestreet

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