The Greek prime minister Lucas Papademos has conceded that the crisis-plagued country could require a third bailout only weeks after it secured a second package of rescue funds following months of hand-wringing in Brussels.
Athens may have received the biggest bailout in history but another lifeline could not be ruled out, the technocratic leader said in an interview. So far, the EU and International Monetary Fund have committed a total €240bn (£200bn) to the near-bankrupt nation.
"Some form of financial assistance might be necessary but we have to work intensely to avoid such an event," Papademos told the Italian business daily Il Sole 24 Ore.
Addressing the Greek parliament on Friday he warned of further spending cuts, saying whatever government emerged after forthcoming general elections it was vital that it prepared for the measures.
"In 2013-2014, a reduction in state spending of about €12bn is required under the new economic programme," Papademos told MPs in what is expected to be one of his last appearances before the 300-seat house.
"Every effort must be made to limit wasteful spending and not to further burden salaries of civil servants."
Well-placed sources said the prospect of further aid would be "a given" if Greece was unable to service its debt by borrowing on international markets.
Papademos, a former vice president of the European Central Bank, said even if Athens enforced all the reforms being demanded by its "troika" of creditors at the EU, ECB and IMF, it remained far from certain that it would be able to access capital markets by 2015, when the country's latest financial support program ends.
Greece has been locked out of markets since first seeking international aid in May 2010. "It is difficult to foresee market conditions and expectations in 2015," said the leader.
But addressing MPs, Papademos insisted that after this month's write-down of Greek debt, the cash-strapped economy would begin to rebound in 2013.
The bond swap has sliced around €95bn from the country's €360bn debt with an additional €12bn expected to be erased when, completing the restructuring, coupons governed by foreign law are exchanged next week.
Insiders say the new government will have "about 60 days" to enact long-overdue structural reforms and agree on ways of reining in public debt before troika officials make a crucial inspection tour of Greece in June.
"It is very important that there is no let up in the pace of reforms after elections," said a senior Papademos aide.
This week, the chiefs of both the EU and IMF missions to Greece said while progress had been made meeting deficit-reducing targets, much remained to be done.
"There are still many measures to be taken, painful ones too. I believe we'll be able to see in the second half of the year in which direction we're going, whether we're on the right path or not," said Matthias Mors, head EU monitor.
IMF supervisor Poul Thomsen was tougher still, predicting that economic recovery for the debt stricken country would take "at least a decade."
guardian.co.uk
Athens may have received the biggest bailout in history but another lifeline could not be ruled out, the technocratic leader said in an interview. So far, the EU and International Monetary Fund have committed a total €240bn (£200bn) to the near-bankrupt nation.
"Some form of financial assistance might be necessary but we have to work intensely to avoid such an event," Papademos told the Italian business daily Il Sole 24 Ore.
Addressing the Greek parliament on Friday he warned of further spending cuts, saying whatever government emerged after forthcoming general elections it was vital that it prepared for the measures.
"In 2013-2014, a reduction in state spending of about €12bn is required under the new economic programme," Papademos told MPs in what is expected to be one of his last appearances before the 300-seat house.
"Every effort must be made to limit wasteful spending and not to further burden salaries of civil servants."
Well-placed sources said the prospect of further aid would be "a given" if Greece was unable to service its debt by borrowing on international markets.
Papademos, a former vice president of the European Central Bank, said even if Athens enforced all the reforms being demanded by its "troika" of creditors at the EU, ECB and IMF, it remained far from certain that it would be able to access capital markets by 2015, when the country's latest financial support program ends.
Greece has been locked out of markets since first seeking international aid in May 2010. "It is difficult to foresee market conditions and expectations in 2015," said the leader.
But addressing MPs, Papademos insisted that after this month's write-down of Greek debt, the cash-strapped economy would begin to rebound in 2013.
The bond swap has sliced around €95bn from the country's €360bn debt with an additional €12bn expected to be erased when, completing the restructuring, coupons governed by foreign law are exchanged next week.
Insiders say the new government will have "about 60 days" to enact long-overdue structural reforms and agree on ways of reining in public debt before troika officials make a crucial inspection tour of Greece in June.
"It is very important that there is no let up in the pace of reforms after elections," said a senior Papademos aide.
This week, the chiefs of both the EU and IMF missions to Greece said while progress had been made meeting deficit-reducing targets, much remained to be done.
"There are still many measures to be taken, painful ones too. I believe we'll be able to see in the second half of the year in which direction we're going, whether we're on the right path or not," said Matthias Mors, head EU monitor.
IMF supervisor Poul Thomsen was tougher still, predicting that economic recovery for the debt stricken country would take "at least a decade."
guardian.co.uk
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