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17th Dec 2018

Greece could need extra €10bn from bailout

  • Oettinger - A third Greek bailout could be worth more than €10 billion. (Photo: European Commission)

Changes to Greece's EU bailout programme could be worth over €10 billion, Germany's European commissioner said Sunday (25 August).

Guenther Oettinger, a member of chancellor Angela Merkel's Christian Democrat (CDU) party and the EU's industry commissioner, claimed that the cash-strapped country would need a package in the range of a “small two-digit billion” during an interview with Die Welt am Sonntag newspaper.

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Oettinger's remarks make him the second senior CDU figure to admit that Greece will need more time and money to cope with its debt burden which currently stands at around 190 percent of GDP. Although Merkel continues to rule out the prospect of renegotiating the package, which could include a further write-down of Greece's debts, veteran finance minister Wolfgang Schaueble broke ranks on the issue last week.

Meanwhile, Greek Finance Minister Yannis Stournaras, has also suggested that Greece may need an extra €10 billion euros to its aid package.

The question of whether Greece, which is now in its sixth consecutive year of recession, will need a further loosening of the country's €240 billion aid programme has become a controversial issue in Germany as politicians enter the final weeks of the federal election campaign.

Two weeks ago, an internal Bundesbank report leaked to the media stated that the EU would "certainly agree a new aid programme for Greece" by early 2014.

Peer Steinbruck, the leader of the opposition social democrats, quickly accused Merkel of misleading voters by downplaying the prospects of German taxpayers bearing higher liabilities to Greece.

According to the Handelsblatt Research Institute, German taxpayers are currently liable for €150bn in bailout loans across the eurozone, more than 30 percent higher than the German government’s estimate of €95.3bn.

Germans will vote on 22 September with Merkel bidding for a third term as Chancellor. Opinion polls suggest that Merkel's governing coalition with the Free Democrat party (FDP) could win an overall majority provided that the FDP reaches the 5 percent threshold required to win seats in the Bundestag, with Merkel's Christian Democrats currently polling at around 40 percent, more than 10 points ahead of the social democrats.

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German finance minster Schaeuble put a cat among the pigeons by saying Greece will need a third bailout, a taboo before September elections. But insiders say it was no accident.

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