Greece won't last in euro zone in long-run: Bavarian finance minister

BERLIN (Reuters) - Greece will not last in the eurozone in the long run and officials working on a review of its bailout package should prepare for such a possibility, a senior member of the Bavarian sister party of Chancellor Angela Merkel’s conservatives said.

Greece has lost a quarter of its national output since it first sought financial aid in 2010. Its current bailout package is the third in seven years.

“Greece is unlikely to survive in the eurozone over the long term,” Bavarian Finance Minister Markus Soeder told the Handelsblatt newspaper in an interview published on Tuesday.

Soeder urged officials working on the bailout review to develop a “Plan B” or alternative plan.

“We’ll see if Greece meets the conditions. I’m very skeptical,” Soeder said, adding that the participation of the International Monetary Fund was essential.

Soeder’s Christian Social Union is the Bavarian sister party of Merkel’s Christian Democrats and has long accused Greece of failing to implement reforms promised under its bailout packages.

Germany faces a national election in September and the anti-euro Alternative for Germany party (AfD), which has been particularly critical of euro zone bailouts, is expected to perform well.

Greek Finance Minister Euclid Tsakalotos said on Monday he planned to stay in Brussels for further consultations with his country’s creditors towards finalizing the latest bailout review. He said he hoped for a preliminary deal by April 7.

Greece and its international lenders are still at odds over pension, labor and energy market reforms that are needed before new loans can be disbursed to Athens.

The Washington-based IMF has yet to decide whether to participate in Greece’s 86 billion euro bailout, expressing deep concerns over debt sustainability in the crisis-hit nation.

Reporting by Andrea Shalal; Editing by Gareth Jones