Greece will need more aid after IMF’s current bailout

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Greece

Greece will need further financial support when its European bailout programme ends in December, an EU official predicted Monday, despite the unpopularity of the conditions attached to the international aid disbursed to date.

Greece“It seems as if a completely clean [bailout] exit is highly unlikely,” the official said on condition of anonymity, referring to the possibility of the Greek bailout ending without strings attached.

Athens is keen on a clear end to the 240 billion euros (300 billion dollars) in rescue packages it has received since 2010, which have come with strict requirements that have led to unpopular tax hikes, salary reductions and pension cuts.

But talk of Greece wanting to make a clean break unleashed nervousness on the financial markets last month. This volatility proves that a “structured contractual relationship” between Greece and its EU creditors is needed, the official argued.

Among the options being considered is a precautionary credit line from the European Union’s bailout fund, to reassure nervous investors. Though it would not amount to a full bailout programme, it would involve “enhanced surveillance” from the EU over Greece.

The country is expected to need some 10 billion euros next year. The EU official did not rule out that already approved aid earmarked for the recapitalization of Greek banks could be redeployed.

Eurozone finance ministers will discuss the road ahead for Greece during talks in Brussels on Thursday, with a decision needed at the latest in early December, according to the official.

The most controversial aspect of the discussions is likely to be whether the International Monetary Fund (IMF) should be involved in the new support for Greece, the official said.

The IMF’s current bailout programme for Greece is due to end in early 2016.

GNA

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