German finance minister says Greece will need a third bailout
On eve of German election, Wolfgang Schauble admits Greece will require further support
WOLFGANG SCHAUBLE, one of Europe's most powerful politicians, caused shockwaves across Europe yesterday after claiming Greece would need a third international bailout.
The German Finance Minister told an election rally: "There will have to be another programme in Greece." He said it was necessary get the country "over the hill" of debt financing, The Times reports. Greece has already received €240bn under previous packages.
The warning comes as Germany prepares for a general election next month. So far the subject of the eurozone debt crisis has been avoided in the run-up to the vote because of public antipathy towards the provision of more money to help beleaguered European states.
Seizing on the comments, Peer Steinbruck, the Social Democrat candidate standing against Chancellor Angela Merkel, accused the government of hiding the truth about Greece.
However, Michala Marcussen, global head of economics at Societe Generale, said the idea of Greece needing a third bailout was not new: "It is a little surprising that he has come out and made this statement now, but he is reiterating what the IMF has already said implicitly." Schäuble himself said it had been predicted "a long time ago".
Earlier this summer, the International Monetary Fund estimated that Greece, now in its sixth year of recession and rising joblessness, faces a funding gap of €10.9bn in 2014-15. Athens is expected to sell a number of bonds next year to make up some of the shortfall. However, analysts predict Greece will struggle to come up with enough to tackle the crisis.
Peter Bone, Tory MP for Wellingborough Rushden, said the warning shows it is time for Greece to leave the euro and get back to the drachma. "You can't keep bailing out countries indefinitely," he said. "There's a European elite who believe that the euro is like a religion and will do anything to rescue it. We aren't part of the euro, and for good reason." ·