Bundesbank says Greece will need extra aid by early 2014

 
City A.M. Reporter
GERMANY’S central bank expects that Greece will need additional rescue loans from its European partners by the start of 2014 at the very latest, weekly magazine Der Spiegel reported yesterday, citing a document from the Bundesbank.

The report could rekindle a debate in Germany about whether Chancellor Angela Merkel is playing down the prospects of further help for Greece before a 22 September election in which she is favoured to win a third term.

Greece has received two bailouts from the EU and the IMF, totalling €240bn (£210bn), and has drawn down 90 per cent of those funds. The package is due to expire at the end of 2014.

Merkel has said repeatedly that the Greek rescue is on track, rejecting the suggestion that extra aid, or debt relief, will be needed.

The Spiegel report cited what it said was a Bundesbank report for the German finance ministry and the IMF. In the document, the bank predicts European governments “will certainly agree a new aid programme for Greece” by early 2014 at the latest. The Bundesbank and the German finance ministry were unavailable for comment.