Is Greece on the verge of asking for a third bailout?
Even before the ink was dry on the extension of its current bailout program, speculation is growing that embattled Greece is on the verge of asking for yet more cash.
“The Greek need for a third program is extremely high,” Carsten Brzeski, a senior economist at ING told CNBC via email. “There will be new negotiations. And these negotiations will be tough.”
Greece received its first slice of aid in 2010 with a 110 billion euro ($123 billion) rescue package. Its second program brought the bailout total to 240 billion euros ($272 billion) and the deadline for repayment was extended this week – for another four months – on the premise that Greece’s government will make a renewed push for economic reforms. Unlike other euro zone members like Ireland and Portugal, Greece still requires financial aid due to its hefty debt burdens.
$30 billion more?
Speculation that it could ask for more bailout money has mainly been sparked by the German media. Talk of a third program has been around for months – if not years – but has returned to the limelight this week after negotiations for its current extension became so fraught.
News organization MNI (Market News International) reported Thursday that Greece’s creditors have been mulling the “possibility” of a third package for several months, citing a top euro zone official. Its source also said that this possibility had now increased in anticipation of higher deficits and weaker growth due to the turmoil of the country’s recent snap election. The news flash was actually credited with sending the euro lower on Thursday afternoon, although other analysts attributed the move to fresh economic data from the U.S.
The figure being bandied around is another 30 billion euro loan for Greece. German news publications Rheinische Post and Frankfurter Allgemeine Zeitung have both run headlines this week discussing the likelihood of another rescue package and have quoted top economists and lawmakers from the country.
