Greece May Extend Bailout Deadline With Eurozone Partners

27/11/2014

By Stelios Bouras

Talks With International Creditors Fail to Break a Deadlock Over Its Reform Program

Greece said Thursday it may be necessary to extend its current bailout program with its eurozone partners for a few weeks after two days of talks with international creditors failed to reach a deal that would lead to a new contingent credit line for the country.

With Greece’s economy returning to growth and the public finances improving, Athens is hoping to replace its €240 billion ($300 billion) bailout program, funded by its eurozone partners and the International Monetary Fund—by the end of the year.

However, failure to break a deadlock with international creditors in Paris this week over its austerity and reform program means that the country’s final review may not be completed in time for the switch to a new credit line to take place. A contingent credit line would be tapped only if needed.

Since the start of the Greek debt crisis in late 2009, Athens has received two successive bailouts from its eurozone partners and the IMF.

The eurozone’s portion of that loan—roughly three quarters of the total—runs out at the end of the year, while the IMF has earmarked funding for Greece through to the second quarter of 2016.

In comments to reporters, Deputy Prime Minister Evangelos Venizelos said that if no deal is reached soon, then the current loan program could be briefly extended, but ruled out the possibility of Greece receiving a fresh aid package.

“The European program ends on Dec. 31. The aim is for the last tranche to be paid before December 31. If, for technical reasons, some procedures cannot be completed, then it could be extended,” he said after meeting with Prime Minister Antonis Samaras.

Eurozone officials say Greece’s creditors are leaning toward extending Greece’s current program by anywhere from a few weeks up to six months.

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