The European Central Bank joined Germany yesterday in playing down talk of a third bail-out package for Greece, but reaffirmed the eurozone would help the country trim debt as long as it stuck to its latest aid programme.
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, provided it sticks to its current 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 calling a rescue inevitable.
Greece has already been bailed out twice since 2010 with €240 billion 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 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 programme 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 programme. It is August 2013, we will certainly have to look in mid-2014 at where we are, what the conditions are and whether the programme has been fulfilled,” said spokesman Martin Kotthaus.
Schaeuble’s boss Chancellor Angela Merkel, in her first comments on Greece since his comments, said 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.
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.
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 privatisation revenues and Greece being unlikely to fully return to bond markets next year.