MILAN, March 30 Prime Minister Lucas Papademos
said on Friday Greece may need a third bailout package if the
sweeping austerity measures demanded by its international
creditors fail to stabilise its shattered economy and restore
It was the first time Papademos publicly confronted his
people with the risk, already mooted by wary EU, IMF and German
officials, that the austerity programme might fall through if
they don't try hard enough.
His remarks were seen as an encouragement to support
pro-bailout parties in a snap election expected on May 6.
"Greece will do everything possible to make a third
adjustment programme unnecessary," Papademos told Italian
business daily Il Sole 24 Ore, according to a transcript of his
remarks. "Having said that, markets may not be accessible by
Greece even if it has implemented fully all measures agreed on.
"It cannot be excluded that some financial support may be
necessary, but we must try hard to avoid such an outcome."
Greece secured a 130 billion euro bailout from the
International Monetary Fund and the European Union last month
after it won agreement from private sector creditors to take
part in the biggest debt restructuring in history.
But with its economy in the fifth year of deep recession,
scepticism about the effectiveness of government reform measures
and deep public resistance to further doses of austerity, there
have been widespread expectations that more aid will be needed.
According to an analysis from the IMF, the EU and European
Central Bank, even if Greece sticks to its agreed reform
programme to 2030, it may need more support after 2014.
However, Papademos repeated that Greece would do everything
necessary to remain in the euro zone, saying the consequences of
an exit would be "devastating".
"More than 70 percent of the Greek people support the
country's continuing participation in the euro area," he told
the Italian business newspaper. "They realise, despite the
sacrifices made, that the long-term benefits from remaining in
the euro zone outweigh the short-term costs."
Speaking in parliament on Friday, Papademos warned lawmakers
that the government would need to identify almost 12 billion
euros of fresh budget cuts for 2013 and 2014 immediately after
the upcoming election, expected on May 6.
"What's important is to implement the policies included in
the (bailout) programme in an effectively and timely manner," he
said. "If this doesn't happen, nobody can expect its anticipated
results to materialise."