EU Wary of Greek Hopes To Avoid Third Bailout

Fresh on the heels of the news that international lenders would release a long-delayed installment of 8.3 billion euros in three installments, the government said it won’t need a third rescue package and hopes to return to the markets, although wariness remained.
Greece was cut off from borrowing privately in 2010 when the then-PASOK Socialist government of Prime Minister George Papandreou asked for a bailout from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that turned into two totaling 240 billion euros, about $330.7 billion.
The next year, the Papandreou Administration stiffed investors, including Diaspora bondholders, with 74 percent losses over 30-year returns, further preventing any imminent return to borrowing.
Now, however, after unrelenting austerity measures, Prime Minister Antonis Samaras said there’s a primary surplus of about 1.5 billion euros and he thinks Greece can begin to recover on its own without further aid.
Encouraged by falling bond yields, Greece is considering ending its four-year exclusion from bond markets by selling 1.5 billion-2 billion euros of five-year bonds in a test issue in the first half of the year to supplement what’s left of the Troika monies, most of which run out this year.
The certainty that Greece will have enough money over the next 12 months to cover its expenses is important because it is a condition for the IMF to keep lending to Athens even after Eurozone loans stop, and in case the government can’t get sufficient money from the markets if burned investors stay away.
“We had assurance … that Greece is fully financed for the coming 12 months,” Eurozone chief Jeroen Dijsselbloem told a news conference in Athens after a meeting of Eurozone finance chiefs.
What happens after the next 12 months, however, is still uncertain because it depends on market conditions and on the Greek economy.
Last week, a senior Eurozone official said there were no plans for a third bailout, and such an option would be considered only if Greece asks for it.
“I have taken note of the optimism, or, let’s say the ambition of the Greek government, not to have another program. Of course I would like to share that ambition, yet I think it’s too early to say,” Dijsselbloem said.