World Economy

Greece Third Bailout Seen at €30-50b

Greece Third Bailout Seen at €30-50bGreece Third Bailout Seen at €30-50b

Spanish Economy Minister Luis de Guindos said European Union officials are estimating that a hypothetical third bailout for Greece could amount to between 30 and 50 billion euros ($34-55 billion).

European officials have estimated that Greece’s financing needs could require an aid package of “30 billion, 40 billion, 50 billion euros”, the minister told reporters in the northern city of Pamplona according to his press office, AFP reported.

Without confirming that talks were under way for a third bailout, the minister said Spain would contribute “around 13 percent of the amount” if another aid package were to be granted to Greece.

German newspaper Rheinische Post reported on February 25, citing sources in Berlin, that a third bailout for Greece would be worth 20 billion euros.

It is “way too early” to talk of a third bailout, a spokesman for Germany’s finance ministry said at the time.

A third bailout would be a serious reversal for Greece’s new hard-left government which swept to power in January on the promise that Athens would leave the era of European Union bailouts and their associated spending cuts behind.

Greece would prefer to receive a credit line but “it is more likely that we will move towards a new program”, a senior European official said Tuesday.

  Two Previous Bailouts

Greece received two bailouts, in 2010 and 2012, worth a total of 240 billion euros and new Greek Prime Minister Alexis Tsipras has repeatedly said there would be no “third memorandum” as the previous agreements are known.

De Guindos’ comments come after a weekend of tense exchanges between Athens and Madrid.

Tsipras said Saturday that during recent talks that earned Greece a four-month extension to its bailout, pressure from certain other European countries “had the character of blackmail” – pointing especially to Spain and Portugal.

“Conservative forces (in Europe) tried to set a trap for us, to drive us into financial asphyxia,” he added.

Spanish Prime Minister Mariano Rajoy hit back on Sunday, accusing Tsipras of seeking an “external enemy” and of “not being serious”.

Both Madrid and Lisbon have filed official protests against Tsipras’s comments with Brussels.

“Neither Spain nor Portugal were the hardest nations” at the talks, de Guindos said Monday.

  Submitting of Proposals

Greece will speed up its reform proposals to its international creditors to unlock vital loans, its finance minister said Tuesday.

“(On March 9) I will submit a folder of six proposals and discuss with our peers which ones can be implemented immediately,” Finance Minister Yanis Varoufakis told Star TV in an interview.

Greece’s new government has until April to present reform proposals to its EU-IMF creditors in order to win approval for its plans for a four-year economic recovery blueprint.

Until an agreement is reached, Athens has no access to funds remaining in its 240-billion euro ($272 billion) EU-IMF bailout.

And Greece this month needs to find around 6.0 billion euros ($6.8 billion) for debt repayments.

Eurozone chief Jeroen Dijsselbloem told the Financial Times on Monday that Athens could tap EU loans before the April deadline by showing reform progress.

“This is not a bad proposal at all,” Varoufakis said on Tuesday. The minister insisted that Greece would meet its March payment needs.

“March is solved. We are in the process of securing funds to cover the entire four-month period,” he said.

In the upcoming talks, Varoufakis said Greece’s goal was to restructure the country’s huge debt and set sustainable growth goals. “Debt repayment should be linked to (Greece’s) growth rate. This is a red line for us,” he said.