German finance minister says Greece needs third bailout

Five weeks before the elections, Germany’s finance minister Wolfgang Schaeuble has warned that Greece will need a third bailout.

Addressing a campaign audience in northern Germany, Schaeuble said:”There will have to be another programme in Greece.”

Just hours before he spoke, German Chancellor Angela Merkel was quoted in a regional newspaper dismissing questions about further aid for Greece, saying there was no point in discussing the matter until its second package expires at the end of next year.

Meanwhile, Greek finance ministry official told Reuters a new bailout would involve sums far smaller than previous rescues, which run to €210bn (£179bn), and would focus on plugging an expected funding shortfall over 2014-2016.

“Greece and its lenders are examining several ways to plug any funding gap that Greece will face over the next few years,” the official told Reuters on condition of anonymity.

As German newspaper Sueddeutsche Zeitung reported citing unnamed sources,the aid programme announced by Schaeuble will be partly financed via the EU budget. However, being Europe’s biggest economy, Germany is supposed to take the biggest share of the bailouts, which are unpopular with taxpayers.

In the first quarter of 2013, Greece’s government debt stood at €305.3bn, or 160.5% of GDP.

 

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