Greece May Need Two More Bailouts: ECB Official


Greece could require two more bailouts to keep its economy afloat, warned European Central Bank Governing Council member Luc Coene on Wednesday, though he remained confident that the worst of the eurozone crisis was already over, reported Reuters.

"It's clear that we are not yet at the end of the Greek problem. We will need to make further efforts, certainly once, perhaps twice more. We will see how the situation develops," Coene told La Premiere radio station, highlighting that Greece would need between 10-11 billion euros in the second half of 2014 to balance its budget.

"There is an improvement but it is very slow. Naturally the economic base of Greece is extremely small and it will take a lot of time gradually to put it back in order," Coene added.

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However the ECB Governing Council member, who is also governor of Belgium's central bank said that the financial situation across the eurozone was now “much better armed” to ward off another crisis.

"The problem at the start was about the willingness of other countries to help. This has been resolved by the governments and also by the ECB," he said.

Coene’s comments echoed similar comments made by Germany’s finance minister Wolfgang Schaeuble last month, predicting that Greece would need at least another bailout to supplement its current 240 billion euro rescue package.

Speaking in Athens in August, ECB board member Joerg Asmussen however denied that the bank had discussed the possibility of another bailout during talks with senior Greek officials. Rather the ECB’s main priority was whether Greece had made enough progress in its reforms before the next tranche of aid is due to be released in October.

Asmussen reiterated the eurozone's pledge last year to support Greece until it can tap markets again if it sticks to its current bailout obligations and posts a budget surplus before interest payments.

On Tuesday, the Greek finance ministry reported that its budget was in surplus, not counting interest payments, and was on course to fulfill their creditors’ requirements.

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The central government had a primary budget surplus of 2.92 billion euros between January and August, surpassing expectations set for a deficit of 2.5 billion euros during the same period.

"The target to reach a surplus at the end of the year becomes more and more feasible," said Deputy Finance Minister Christos Staikouras.