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Will it ever end? Greece will need another bailout, German finance minister says

By Catholic Online (NEWS CONSORTIUM)
August 21st, 2013
Catholic Online (www.catholic.org)

A growing international wave of concern has been sounding warning bells. Now, German Finance Minister Wolfgang Schäuble has said for the first time that Greece will need another bailout to plug a forthcoming funding gap. Schäuble's comments come at a touchy time for his party as Germany will hold elections in five weeks' time.

LOS ANGELES, CA (Catholic Online) - Germans are understandably anxious over the size of European country bailouts, as they always wind up paying the lion's share.

German Chancellor Angela Merkel recently said it was too early to talk about new funding. Schäuble was far more forthright, telling an election rally: "There will have to be another program in Greece."

In the lingo of the euro-zone debt crisis, a "program" means aid loans conditional on economic overhauls Greece would have to enact.

Schäuble has previously warned Germany's parliament and media that European taxpayers might have to lend Greece more money. But his language on the campaign trail was less hedged than before, and could embarrass the German government ahead of Germany's national elections on September 22.

His comments have placed him as one among many who believe Greece will have to be given new funding to balance its books. His diagnosis is at odds with his party's stance.

The amount of new money in question is likely to be far smaller than the 240 billion Euros (£205 billion, $320 billion) already granted by the International Monetary Fund, the European Central Bank and the European Union. The IMF last month estimated Greece will need around 11bn Euros in 2014-15.

Any new bailout would involve sums far smaller than in previous rescues and would focus on plugging an expected funding shortfall over 2014-16, a Greek finance ministry official told Reuters news.

Greece's economy has shrunk further than any other in Europe, with bailout money only released on condition that the government imposes cuts and implements restructuring.

Inspectors from the bodies overseeing Greece's bailout conditions, the European Commission, European Central Bank and IMF, are set to visit Greece in the fall to see if further cuts and reforms are needed to help Greece reduce its debts.

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