Greece’s hopes of taking an early exit from its bailout deals with international lenders can’t happen without some form of continued funding, a high-ranking European Union official said.
The official, who was not named, said Greece is “highly unlikely,” to end its Eurozone bailout program without a source of backup monies, Kathimerini and Reuters said.
The government said it was already considering using 11.4 billion euros slated for bank recapitalization, from the rescue packages being up by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB), most of which runs out this year.
“A completely clean exit is highly unlikely,” the official told reporters. “We will have to explore what other options there are. Whatever options we may be adopting, it will be a contractual relationship between the euro area institutions and the Greek authorities,” the official said.
That could tie Greece to a continued tether that Prime Minister Antonis Samaras wants to avoid because the monies have come so far with harsh austerity measures cutting deeply into the popularity of his New Democracy Conservatives and its coalition partner, the PASOK Socialists.
The EU official said he expected Eurozone ministers and Greece to decide on how best to help Athens at a meeting of finance ministers in Brussels on Dec. 8. That should give time for parliamentary approval before the December recess.
The official gave no details of what new aid might look like, but policymakers have said that the most likely tool is an Enhanced Conditions Credit Line, or ECCL, from the European Stability Mechanism.
That means Greece would be under detailed surveillance from the European Commission, the EU executive, for the duration of the credit line.
“There needs to be money available for drawing on,” the official said. “If you look at market volatility over recent weeks, one doesn’t need any further explanation of why a contractual arrangement makes sense.”
Greece has some 11 billion euros left with the Hellenic Financial Stability Facility (HFSF), but results of the European Central Bank Asset Quality Review and stress tests showed that only a fraction of that sum will be needed.
“What is left over from the recapitalization buffer could be used in such a program or credit line,” the senior official said on condition of anonymity.