Source: Eurostat |
The Greek government wants to use this opportunity to obtain yet another bailout loan from the EU/IMF. In spite of this slowdown in GDP contraction and a somewhat better fiscal deficit, the Greek government is expected to run out of money by the end of next year.
Barclays Research: - ... the programme could very likely run out of funds before the end of 2014 as lower-than-expected growth last year, extra costs for buybacks and the delays in implementing reforms have opened up a funding gap. In addition, at this stage, we don’t see how Greece could be in a position to return to market funding by the end of 2014, meaning that it will also need its bailout programme extending. Finally, long-term sustainability is still far from obvious and reaching the magical 120% debt-to-GDP ratio by 2020 will require substantial debt-relief measures.
A rift is developing within the IMF over the fund's ongoing
disbursements to Greece from funds that have already been
committed. The IMF has been pressuring the EU for some time
to provide Greece with some "debt relief/extension" -
possibly including outright "haircuts" to public sector
loans. That means the Eurozone nations will need to accept
worse terms and possibly a write-down of some sort in order
to make the bailout plan more "sustainable".
The European Commission however is not ready to kick off the discussions on the topic - at least not until after the upcoming German elections in late September. And the idea of relaxing conditions for current funding as well as additional funding for Greece is generating some skepticism in Germany.
The European Commission however is not ready to kick off the discussions on the topic - at least not until after the upcoming German elections in late September. And the idea of relaxing conditions for current funding as well as additional funding for Greece is generating some skepticism in Germany.
The Local: - Germany's central bank expects Greece to receive another bail-out loan later this year or by early 2014, the German weekly Der Spiegel reported Sunday, citing an internal Bundesbank document.
[Bundesbank's] experts however rated the risks of the international loan programme as "exceptionally high" and the Greek government's performance as "barely satisfactory", the magazine said.
The paper's authors also voiced "considerable doubt" about the Greek government's ability to implement essential reforms, said Der Spiegel.
The paper, reportedly written for Germany's finance ministry and the International Monetary Fund (IMF), also criticised the latest credit tranche, saying it had been approved due to "political constraints".