Instead, the euro zone is now focusing on the timing and size of
disbursements of badly delayed tranches of loans that have already
been promised under the first two rescue packages, the official,
directly involved in the Greek bailouts said.
Euro zone countries have come up with aid of 240 billion euros for
Greece to help it reform and put its public finances back in order
after since the country was cut off from markets in 2010 because its
public finances have spun out of control.
The second euro zone bailout program for Greece expires at the end
of this year. Yet with an inverted yield curve and a 10-year
borrowing cost still at around 6.8 percent, Athens can hardly hope
to sustainably finance itself on the market.
In February, German media reported that Berlin was preparing for the
possibility that the euro zone would have to support Greece with an
extra 10 billion to 20 billion euros.
But asked if any plans were being made to help Greece finance itself
in 2015 and 2016, the official said:
"Within our circles there has been absolutely no discussion of that,
program for now is up until end-2014."
The International Monetary Fund, which also lends to Greece, has a
financing program running until the first quarter of 2016. The catch
is that the IMF will not disburse its money unless Greek financing
needs are fully covered during that period, either by the euro zone
"The Fund (IMF) will require assurance by its European partners that
if so required, financing would be available. And I have no reason
to doubt that such assurances, if asked, would be given," the
Euro zone finance ministers will meet on Tuesday in Athens to
discuss the timetable and size of loan disbursements that Greece
should get under the existing program, after the initial schedule
was derailed by six months of negotiations over what the country
must do to get the money.
Greece needs 9.3 billion euros to pay for its bonds maturing in May,
and the official said the first tranche of the loans that euro zone
ministers will discuss on Tuesday will certainly cover such needs.
"Of course the disbursements will be made in a volume and timing
that makes sure redemptions are fully insured," he said.
"The ministers will be discussing amounts and we have no firm data
on that yet, but I expect it to be in the very low double-digit
range or in the high single-digit range," the official said.
There might be one or two more tranches of loans to Greece after
that in the next three months, the official said.
RETURN TO MARKETS RATHER THAN ANOTHER BAILOUT?
Greece said on Wednesday it was "almost ready" to return to the bond
markets after a four-year absence and that any bond sale would
probably take place after European Union elections in May.
[to top of second column]
The government, which planned a return to markets in the second half
of this year, has been encouraged by falling bond yields to consider
a quicker return, although a final decision has not been taken.
"I cannot judge, quite frankly, what the discussions of the Greek
authorities are when they look at market rates and may feel
compelled or free to start building up a yield curve through
successive bond placements," the official said.
"Which they may possibly, given the environment, be starting in the
not-too-distant future," he said.
Investors have become more enthusiastic about buying bonds of euro
zone countries, driving down yields of all countries that needed
euro zone bailouts — Greece, Ireland, Portugal, Cyprus and Spain.
"There is at present, for all program countries of our
macro-assistance programs, a very, very favorable environment in
terms of financing conditions. For sure everybody will be availing
themselves of this very, very favorable environment," the official
"Will this be done in a such a volume that they (Greece) can
immediately wave 'Goodbye' to us, that depends on the specificities
of their market access. But the situation is good," he said.
Given that Greece was already running a primary surplus, which means
there is money in the budget before it has to pay debt servicing
costs, the amounts that Athens would have to borrow would be very
"It is for the Greek authorities to analyze the situation very
carefully, which will probably be done once we've got the final view
on our disbursement schedule and then have a intense discussion with
the debt manager and see what's going to happen," the official said.
"If there ever were to be an extension of the program (a third
bailout) it's for them (Athens) to say: 'We think we would want it',
and not for us to say: 'We think you should'."
(Editing by Eric Walsh)
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