Greece May Need More Aid

It’s been nearly a year since the economic crisis in Greece reared its ugly head, but there are signs now that the nation may need to turn to Europe (read, mostly Germany) for more aid in the near future:

Greece may need a third bailout but would not accept new austerity measures, the Greek finance minister has said.

Yannis Stournaras said: “If there is need for further support to Greece, it will be in the order of about 10bn euros (£8.6bn; $13.4bn), or much smaller than the previous programmes.”

Greece has already received two bailouts totalling about 240bn euros.

Meanwhile, Angela Merkel has warned about writing down any more Greek debt.

Germany’s chancellor said a so-called haircut of Greek debt would be bad for the stability of the eurozone, which has seen a return in investor confidence after years of worrying about the future of the single currency following bailouts of several nations – most recently, Cyprus.

“I am expressly warning against a haircut,” Mrs Merkel said. “It could trigger a domino effect of uncertainty with the result that the readiness of private investors to invest in the eurozone again falls to nothing.”

Her comments come after Germany’s finance minister, Wolfgang Schaeuble, said – for the first time – earlier this month that Greece will need another bailout to plug a forthcoming funding gap.

As Walter Russell Mead notes, this latest probable crisis comes at a time when Germany is nearing national elections, most likely not the most politically advantageous time for Prime Minister Angela Merkel and her ruling party. At the very least, the timing likely means that the Germans are less likely to be conciliatory than they may have in the past, and that we’re likely to see Greece erupt into political chaos yet again. It’s really all become a rather familiar pattern.

FILED UNDER: Economics and Business, Europe, Quick Takes, , ,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. al-Ameda says:

    Yannis Stournaras said: “If there is need for further support to Greece, it will be in the order of about 10bn euros (£8.6bn; $13.4bn), or much smaller than the previous programmes.”
    Greece has already received two bailouts totalling about 240bn euros.

    The additional amount is relatively minor in magnitude compared with the initial bailouts. It seems to me that the situation is stabilizing.

  2. michael reynolds says:

    Despite endless predictions of Eurotastrophe, the Euro is at $1.33. Pretty much where it’s been since I left Italy four years ago, having stayed in Italy just long enough to endure the $1.60 Euro.

    This “collapse” of the Euro seems to be taking its sweet time, and thus far does not seem to have convinced the people who actually buy or sell Euros.

  3. anjin-san says:

    This “collapse” of the Euro

    I am still waiting for the collapse of Europe’s socialized medical system that conservatives have been telling us is coming any day – since 1980.

  4. Pinky says:

    Greece may need a third bailout but would not accept new austerity measures, the Greek finance minister has said.

    Teenager may need increased allowance, refuses to get part-time job.

  5. Andre kanji says:

    The problem is not the collapse of the Euro. It’s the Euro bringing Europe to a collapse.

    P.s: I’ve got caught by the antispam filter. I know that my comments are bad, but are they THAT bad?

  6. al-Ameda says:

    @Pinky:

    Teenager may need increased allowance, refuses to get part-time job.

    Why? Heck, we paid for 2 wars in the Middle East completely by way of deficit financing, we refused to get a part-time job too.

    Seriously though, Greece has implemented austerity measures, received a bailout, and is now emerging from that terrible financial crisis – that final estimated amount is very low relative to the first two bailouts.

  7. anjin-san says:

    we paid for 2 wars in the Middle East completely by way of deficit financing,

    If I recall correctly, the previous administration cooked the books to hide the true cost of the wars and make the federal budget situation look better than it really was.

  8. Matt says:

    @Pinky: It would help if tax cheating wasn’t a national past time in Greece..

  9. Matt says:

    @anjin-san: Yeah when you keep the true cost of the wars off the books by having supplementals passed to pay for them..

    Then when Obama properly budgeted for the wars they got to scream OMGZ HE”S COSTING US SO MUCH MONIES!!!

  10. Pinky says:

    @Matt: Darn it. I accidentally clicked “like” for this comment. I should have read it more carefully. The cost of the wars wasn’t hidden. Historical budget and deficit data include everything. President Obama really has spent ridiculously more than his predecessor.

  11. Matt says:

    @Pinky: Yeah after the fact you can figure out what the real budget was with some googfu. Doesn’t stop the Republicans from citing the budget from the bush years without mentioning the emergency authorizations….