BRUSSELS: Greece is “highly unlikely” to make a clean exit from its huge EU-IMF bailout and will need some form of further international assistance, a senior European official said yesterday.
Greece is set to end the EU-side of its €240bn ($300bn) rescue plan at the end of the year and embattled Greek Prime Minister Antonis Samaras has made it clear he would like to see the country free itself from all bailout obligations as soon as possible.
But the thought of Greece going it alone without some form of international support and oversight has panicked the markets, sending stock prices in Athens plummeting and Greek interest rates sparking to alarmingly high levels. “It seems that a completely clean exit is highly unlikely and we’ll have to explore other options,” a senior European official said ahead of a Thursday meeting of eurozone finance ministers. The official did not clarify what form the aid could take but given the “market volatility” of recent weeks, “a structured, contractual relationship between euro area institutions and Greece makes sense.”
The assessment flies in the face of promises made by Samaras, who is fighting for his political life with Greek voters exhausted by four years of austerity under a rescue plan put together by the International Monetary Fund, the European Union the and European Central Bank — the so-called Troika.
Markets are also spooked by the increasing likelihood that radical leftists may take power if snap elections are forced early next year, a distinct possibility as resistance grows in the Greek parliament where Samaras has only a razor-thin majority.
In an effort to get voters back on side, Samaras has promised Greeks a complete end to years of painful rescue conditions that have become political poison in Athens. These efforts to end austerity in Greece, whose financial meltdown and debt writedown nearly destroyed the euro, come at a moment of wider concern that the eurozone could fall back into recession. Earlier this year bailed out Portugal and Ireland managed to end their huge EU-IMF bailouts without resorting to further assistance or oversight from the EU or IMF. AFP
