New loan, outlined in
a German finance ministry position paper, would be worth €10bn-€20bn, says Der
Spiegel magazine.
The new loan, outlined in a five-page
position paper by Berlin's finance ministry, would be worth between €10bn to
€20bn (£8bn-16bn), according to the German weekly Der Spiegel, which was leaked
the document.
Such an amount would chime with comments
made by the German finance minister, Wolfgang Schäuble, who, in a separate
interview due to be published on Monday insisted that any additional aid
required by Athens would be "far smaller" than the €240bn it had
received so far.
"What is sure is that any further aid
would be much less expensive than whatever help [has been given] so far,"
he is quoted as telling the German finance magazine Wirtschaftswoche in what
appears to be a calibrated move aimed at preparing public opinion.
The renewed help follows revelations of
clandestine talks between Schäuble and leading EU figures over how to deal with
Greece, which despite receiving the biggest bailout in global financial
history, continues to remain the weakest link in the eurozone.
The talks, said to have taken place on the
sidelines of a Eurogroup meeting of eurozone finance ministers last week, are
believed to have focused on the need to cover an impending shortfall in the
country's financing and the reluctance Athens is displaying to enforce long
overdue structural reforms. The lack of progress is at the root of stalled talks
between Greece and its "troika" of creditors, the International
Monetary Fund (IMF), European Central Bank and EU.
Greece faces a financing gap of up to €15bn
over the next two years, according to foreign creditors, which have kept its
economy afloat since May 2010. As the EU's powerhouse, Berlin has bankrolled
most of the emergency loans to date.
But a German finance ministry spokesman,
echoing similar statements by Schäuble, denied that a further restructuring of
Greece's staggering debt - this time by public creditors - was also on the
cards. "There is no new situation," said the spokesman referring to
previous statements made by Schäuble also rejecting the need for debt relief to
be extended to recession-hit Greece.
Most of the debt overhang now haunting the
country belongs to European governments and at 176% of GDP - up from 120% of
national output at the start of the crisis - is not only a barrier to
investment but widely regarded as being at the root of its economic woes.
"They are missing the point: Greece
does not need a third bailout, it needs debt restructuring," said the
shadow development minister and economics professor, Giorgos Stathakis. "Even
in the IMF, logical people agree there is no way we can have any more fiscal
adjustment when the whole thing has reached its limits," he said.
"There is simply no room for further cuts and further taxes and that is
what they are going to ask for."
He said the assistance was "the wrong
thing at the wrong time". Unemployment is nudging 28% - and youth
unemployment rate tops 60% - while economic recovery is still far from assured,
despite the nation outperforming targets with the achievement of a primary
budget surplus in 2013.
The IMF has been increasingly at odds with
Germany and other lenders over the need to write off Greece's debt.
Confidential records, documenting minutes of meetings held to discuss the
country's first bailout, reveal the level of discord among member states over
the feasibility of the rescue programme. The IMF said last year that without
additional debt relief by eurozone governments, Greece's debt burden could
smother the country's economy.
China, Brazil, Argentina, India, Egypt and
Switzerland have been among the countries expressing grave doubts that the
assistance would work, arguing that Greece might end up worse off after the
austerity programme.
(Source: theguardian.com)