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Euro zone, IMF mull 2-year extension for Greek bailout: Greek finance minister
October 8, 2012 / 10:04 PM / in 5 years

Euro zone, IMF mull 2-year extension for Greek bailout: Greek finance minister

LUXEMBOURG (Reuters) - International lenders are considering giving Greece two more years to reach its budget deficit reduction targets, and the extra time could be financed without more money from the euro zone, Greek Finance Minister Yannis Stournaras said.

“It is now on the table by all members of the troika,” Stournaras told reporters of the 2-year extension.

“All the exercises that we are doing now they assume that the program will last up to 2016, that ... 4.5 percent of GDP (for the budget deficit) will be achieved in 2016 rather than in 2014,” he said .

“The implicit assumption is that the program will be extended despite the fact that it remains extremely frontloaded,” he said.

Asked whether this means that no more additional money from the EU is needed, he said: “Yes, that is my view.”

Asked what the other finance ministers said on this: “We have just started discussions, there is no decision yet.”

Extending the program by two years would create a funding gap of about 12 billion euros, which could be covered by 8 billion euros the International Monetary Fund had set aside in case of a deeper than expected recession, Stournaras said.

Greece could also benefit from “substantial interest savings” as a result of lower borrowing costs of the EFSF bailout fund, he added.

Reporting By Eva Kuehnen; writing by Jan Strupczewski

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