Friday, January 16, 2015

Euro zone ponders up to six-month Greek program extension, third bailout

January 16, 2015

Euro zone officials discussed on Thursday extending Greece's bailout program by up to six months more to allow time for talks with any new government in Athens on closing the current bailout and on what should replace it.

The current bailout, which has already been extended by two months, runs out at the end of February. Athens had hoped to replace it with an Enhanced Conditions Credit Line (ECCL) from the euro zone bailout fund that it would never have to use.

"There will have to be an extension beyond February. It will be inevitable," one euro zone official with knowledge of the talks said. "It could be six months more."

The extension would have to be requested by the new Greek government that emerges after elections on Jan. 25.

But with Greek borrowing costs skyrocketing on uncertainty about policy after the elections, Athens looks set to need further euro zone support and a credit line for insurance purposes only may not be enough, euro zone officials said.


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