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ECB’s Asmussen says Greek bailout review can wait

By   /   22/08/2013  /   Comments Off on ECB’s Asmussen says Greek bailout review can wait


By Lefteris Yallouros – Athens

European Central Bank executive board member Joerg Asmussen met with Greek Prime Minister Antonis Samaras Wednesday in Athens. He also held meetings with Finance Minister Yannis Stournaras and Central Bank governor Giorgos Provopoulos.

On Thursday, the top ECB official will meet with Greek Foreign Minister and government Vice President Evangelos Venizelos.

When asked to comment on the German Finance Minister’s comment that Greece will need a new bailout loan, Mr. Asmussen told the press “we have not discussed this, we have focused on making the current program a success, more growth and jobs.”

The ECB official also said he had nothing to add to a Eurogroup decision in November last year that pledged additional assistance to Greece until it regained access to financial markets, as long as it implemented its bailout and generated a primary surplus. “I’ve seen the data for the first seven months that were encouraging, but one has to continue on this route,” he said.

Mr. Asmussen’s comments did not offer Greece any signs that a haircut is on the way after the Greek election. The country’s government could not have expected much more, however, from Asmussen, a hard advocate of austerity measures who has publicly spoken against suggestions that Greece’s debt should receive a haircut.

Asmussen was seen by Greek opposition parties as a man on a mission to remind Greece of its obligations and that no haircut or easing of austerity was on the cards.

German Chancellor Angela Merkel also said Wednesday it would only be clear “in the middle of next year” what sums might be necessary for a new rescue package for Greece, adding that she still expects no debt writedown for Greece.

Furthermore, Olli Rehn, the European commissioner for economic and monetary affairs, did not rule out the possibility of another bailout either.

With the troika expected in Athens in September for a fresh assessment of progress made in the country’s adjustment program, it is the Greek government’s aim to show it has met obligations with respect to reforms in order to push for some sort of debt relief after the German election.

The problem for Samaras is that the latest messages from Germany and European officials alike don’t leave much hope for the “haircut” Athens would ideally want but rather for a new bailout loan accompanied by a new memorandum signed between Greece and its international lenders. The government would have a difficult time trying to convince voters this isn’t just a one way ticket to more austerity.

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