Greece may ask for second bailout to expire earlier: report

ATHENS Tue Sep 6, 2011 3:19am EDT

A protester raises Greek flag in front of the parliament during a rally against a new austerity package at Athens' Syntagma (Constitution) square June 11, 2011. REUTERS/Pascal Rossignol

A protester raises Greek flag in front of the parliament during a rally against a new austerity package at Athens' Syntagma (Constitution) square June 11, 2011.

Credit: Reuters/Pascal Rossignol

ATHENS (Reuters) - Athens may ask its euro zone partners that its second bailout, agreed by EU leaders in July, expire a year earlier than currently planned because of a higher than expected deficit, newspaper Kathimerini said on Tuesday.

"Athens is expected to propose that the new aid program does not last until 2014 but until the end of 2013, so that the 109 billion euros are sufficient to cover Greece's increased(financing) needs, because of the higher budget deficit," the newspaper said, without citing sources.

The paper reiterated a report it published on Saturday that the government wants to ease the deficit targets of 7.6 and 6.5 percent of GDP for 2011 and 2012 to help the economy emerge from a three-year recession.

"The smaller reduction in the deficit will be offset by a larger effort in the last two years of the program," the paper said.

EU leaders agreed on July 21 to extend a second, 109-billion euro bailout to Greece, on top of a 110 billion euros rescue package the debt-choked country obtained in May 2010.

Germany and others have said it is vital that the bailout and other measures are passed quickly by parliaments, but there have been signs of problems, including a row over the provision of collateral for Greece's additional loans.

(Reporting By Harry Papachristou; editing by Patrick Graham)

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