Germany's finance minister has said for the first time that Greece will need another bailout to plug a forthcoming funding gap. VP Rehn declined to rule it out but said that there were other ways to keep Greece's aid programme going, such as extending the repayment schedule on existing loans.
His comments come at a sensitive time for his party as Germany will hold elections in five weeks' time. Germans are uncomfortable with the size of European country bailouts, for which they pay the lion's share. His boss is Germany's leader, Angela Merkel, who said recently it was too early to talk about new funding. Mr Schäuble's comments place him as one among many who believe Greece will have to be given new funding to balance its books, but they are at odds with his party leader's public stance on the matter.
The amount of new money in question is likely to be far smaller than the €240 billion already granted by the International Monetary Fund (IMF), the European Central Bank and the European Union. A Greek finance ministry official said that any new bailout would involve sums far smaller than in previous rescues and would focus on plugging an expected funding shortfall over 2014-16.
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However, Commission VP Rehn said that there were other ways to keep Greece's aid programme going, such as extending the repayment schedule on existing loans. Greece's troika of lenders - the European Commission, the European Central Bank and the International Monetary Fund - will review the aid programme in the autumn. "Then we will also review Greece's programme's possible continuation and financing. The debt sustainability can be improved, for instance, by extending the loan periods", the Helsingin Sanomat newspaper quoted Mr Rehn as saying on Wednesday.
However an ECB board member, Joerg Asmussen, was in Athens on Wednesday to discuss the country's fiscal reforms with the Greek prime minister and finance minister. A condition of the current bailout deal is that Greece makes cutbacks and restructures its economy. The question of whether more loans are needed depends on the success and pace of this restructuring.
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