Spain insists Greece is heading towards third bailout

4th March 2015, Comments 0 comments

Spain's economy minister reiterated Wednesday that Greece is headed for a third bailout, with the nation unlikely to regain access to capital markets before its current programme expires in June.

Economy Minister Luis de Guindos, one of the frontrunners to take over the presidency of the Eurogroup of finance ministers this year, said "unfortunately it is not very likely" that Greece will be able to return to finance markets.

"If Greece can not gain access to the markets between now and June... we must establish a new agreement with Greece. We can call it agreement, accord, pact, programme, but it is that," he told reporters at an economic forum in Barcelona.

"It will be a line of credit associated with conditions, as usual," he added.

The European Union has played down talk of any new bailout, insisting that it was still finalising details of the four-month extension of Greece's current EU-IMF programme until June, which was agreed on last week.

Eurozone finance ministers, who are due to meet in Brussels next week, "are not discussing any third aid programme," Simone Boitelle, spokeswoman for Eurogroup chairman Jeroen Dijsselbloem, told AFP on Tuesday.

De Guindos on Monday fuelled speculation that a third bailout was in the works when he told journalists in Spain that EU officials estimated a rescue package of up to 50 billion euros ($55 billion) could be needed to keep Greece afloat and avoid a painful exit from the euro.

Accepting an additional life-line would be a major U-turn for Greece's new hard-left Prime Minister Alexis Tsipras, who swept to power in January on the promise that Athens would end the era of bailouts and their associated austerity requirements.

De Guindos comments come in the wake of acrimonious swipes between Greece and several eurozone partners -- foremost Spain.

The barbs began flying after Tsipras accused Spain and Portugal over the weekend of having sought to cut off EU funding to Greece during negotiations last month on the four-month extension to Athens.

Tsipras claimed the two conservative-ruled countries had sought to undermine Greece's anti-austerity government. Germany labelled Tsipras' comments "unusual foul play," while officials in Spain and Portugal responded with retorts of their own.

Greece had two international bailouts in 2010 and 2012 worth 240 billion euros -- which staved off bankruptcy and kept the country in the euro, but at the cost of punishing economic reforms.

© 2015 AFP

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