February 24, 2012 / 10:31 PM / 5 years ago

Eurogroup head cannot rule out third Greek bailout

3 Min Read

LONDON (Reuters) - The head of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker, said on Friday he could not rule out that Greece may need a third bailout.

Euro zone finance ministers struck a deal on Tuesday for a second bailout program for Greece that includes new financing of 130 billion euros and aims to cut Greece's debt to 121 percent of GDP by 2020.

Asked in a television interview if he could be sure Greece would not need a third bailout, Juncker said: "You cannot really exclude that, although we should not have as a starting assumption that a third program will be (needed)."

"We made it clear last Tuesday in Brussels that we are standing ready to support Greece even beyond the time period of this program but I have good reasons to believe that we should now not engage ourselves in a debate on a 'maybe' third program. We should now ... implement the second one," he said, interviewed by David Frost on Al Jazeera.

Asked about some experts' view that a Greek default is inevitable, Juncker said: "I don't see that Greece would go for a default."

The euro zone was doing everything to avoid a disorderly default by Greece, which would have had "tragic consequences, not only for Greece, but for the whole euro area as such," he said.

On whether Greece would succeed in staying in the euro zone, Juncker said: "You can never exclude a new crisis although I do consider that, being at the epicenter of the global threat, we are slowly regaining safe territory."

Under the agreement, private sector holders of Greek debt will take losses of 53.5 percent on the nominal value of their bonds.

However, Juncker said he believed private creditors would lend to Greece again.

"As the private sector and the official sector now can envisage the Greek future and the future of the euro area with some optimism, I don't believe that private sector representatives will step away from Greece," he said.

Juncker said he was "satisfied" with the worldwide reaction to the deal on Greece struck this week. Financial markets had reacted in a "proper way" and "things have improved", he said.

"We were not really rejoicing when we were concluding the deal. Nobody was dancing on the table ... We had to deliver in order to restore stability in Greece and credibility around Greece," he said.

Reporting by Adrian Croft; Editing by Tim Dobbyn

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