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.
