* Says should strike deal next week for 2013 and 2014
* Expects follow-up Greek aid will be necessary thereafter
* IMF wants comprehensive, permanent deal now
By Madeline Chambers
BERLIN, Nov 18 European Central Bank policymaker
Joerg Asmussen said on Sunday the euro zone should agree next
week on two years of funding for Greece and leave further help
to be decided later, a view likely to irk the IMF, which wants a
"We should next week settle the financing for the years 2013
and 2014, but you have to be honest and say we do not really
expect the country to have access to markets in 2015 and 2016;
that means a follow-up programme would be necessary," Asmussen
told German broadcaster ZDF.
A two-year deal would postpone a longer-term solution to the
Greek debt crisis until after a September 2013 German general
election, when it might be politically easier for Germany, the
EU's paymaster, to take tough decisions.
The International Monetary Fund (IMF), however, is unlikely
to welcome further delay.
Euro zone finance ministers and IMF Managing Director
Christine Lagarde meet on Tuesday to try to agree on how to make
Greece's debt manageable, an agreement that eluded them last
German Finance Minister Wolfgang Schaeuble said he was
banking on a deal.
"We must find a common line. We have to find it on Tuesday.
We are working intensively on this, and I think that we will
manage it," Schaeuble told ARD television.
Lagarde told Reuters late on Saturday that she would push
for a permanent solution to Greece's debts to avoid prolonged
uncertainty and further damage to the Greek economy.
IMF officials have argued that some writedown of Greek debt
held by euro zone governments is necessary to make Greece
solvent, but Germany, the biggest contributor to the bloc's
bailout funds, has repeatedly rejected the idea of taking a
loss, or "haircut", on such holdings, saying it would be
"It is a legal matter," Schaeuble reiterated. "You can't
guarantee credit and then take a haircut on the credit you have
guaranteed, that is ruled out."
In an article in Monday's edition of Handelsblatt, Klaus
Regling, head of the European Stability Mechanism (ESM) bailout
fund, said euro zone states would only take a haircut on Greek
debt in extremis.
"A public haircut is something totally extraordinary; it can
only happen in exceptional circumstances," he said.
Among ideas under consideration to plug the funding gap are
further reducing the interest rate and extending the maturity of
euro zone loans to Greece, an interest-payment holiday and
bringing forward loan tranches due at the end of the programme,
according to euro zone sources.
Asmussen told ZDF the problem was that loans alone did not
help as they raised the long-term debt.
"We must look for solutions which do not at the same time
raise the debt level of the country. That could, for example, be
buying back debt or reducing the interest on the outstanding
credit," said Asmussen.
In an unusually public airing of disagreement during a news
conference in Brussels on Nov. 13, Jean-Claude Juncker, who
chairs the Eurogroup of finance ministers, said the target of
reducing Greece's debt to 120 percent of gross domestic product
by 2020 should be moved by two years to 2022.
Appearing surprised by Juncker's statement, Lagarde
disagreed, insisting the target of 2020 should remain.
Under its standard procedures, the IMF cannot go on
disbursing loans unless an adjustment programme is fully funded
up to the end.
Euro zone ministers agreed on Monday to grant Greece an
extra two years, until 2016, to meet its fiscal targets.
Asked if he agreed with Asmussen that Greece would need
further aid, Schaeuble said a two-year extension would cost
more. "If that is what Asmussen meant, he is right," said
"The other problem is that by 2020 or 2022, Greece has to
have reached a level in terms of its overall debt that enables
it to get access again to the markets," said Schaeuble, adding
he did not know how much the whole cost would be.
German Chancellor Angela Merkel has to make sure any easing
of the conditions on Greece are palatable both to taxpayers
before next year's election and her coalition partners.
Horst Seehofer, the head of Bavaria's Christian Social Union
(CSU), which shares power with Merkel's conservatives, on Sunday
struck a more conciliatory tone than previously.
"If the Greeks need more time, you can talk to the CSU about
that," he told Bild am Sonntag newspaper.
"We must consider whether the alternative to a delay for the
Greeks would not cost significantly more money, for example via
a sharp rise in unemployment here," he said.
"The political art is to avoid a conflagration caused by a
Greek bankruptcy without giving up efforts to tackle its debt,"
Several CSU members have taken a tougher line, openly
talking about Greece's possible exit from the euro zone.