Home News Decision on Greek aid in ‘a few weeks’: EU

Decision on Greek aid in ‘a few weeks’: EU

Published on 10/05/2011

A decision on whether Greece needs a second financial bailout will be made "a few weeks," European Union Economic Affairs Commissioner Olli Rehn said Tuesday.

Rehn stressed that that it was “premature” to discuss further steps before EU, IMF and European Central Bank auditors wrap of their current review of Athens’ finances.

Speculation has mounted in recent days that an additional 60 billion euros will be needed over the next two years as Greece has trouble brining its finances back into balance and punitive rates will prevent it from returning to financial markets next year as planned.

Rehn said a “well-informed decision concerning the next steps in the programme for Greece,” possibly including ECB purchases of existing and new bonds, would be made “in a few weeks.”

“The jury is still out, it is still too early to pass final judgment on these programmes,” said the top EU official behind bailout negotiations with Greece, Ireland and Portugal.

He also said to “expect” Ireland to be granted a cut in the interest charged for Dublin’s 67.5-billion bailout similar to that given to Athens in the spring, which secured a reduction of around one percentage point.

However, he went out of his way to dampen feverish speculation since secret talks between key eurozone players in Luxembourg on Friday that fuelled speculation Greece needs a dramatic overhaul of the 110-billion-euro package it secured one year ago.

“These programmes are no Sunday walk in the park,” Rehn said of the Greek and Irish deals.

The average interest rate for Athens is now around 5.2 percent, and Friday’s talks looked at scenarios including the possibility, according to Greek and specialist financial media, of up to 60 billion euros more being needed in 2012 and 2013 as old debt matures.