Greece headed for 4th bailout? Maybe, says Budgetary Office
Any further delays in Greece winding up the current round of bailout talks with international creditors could result in more costs than benefits, said parliament’s Budgetary Office Friday.
Greece has been locked in talk with creditors – eurozone nations and the International Monetary Fund - for several months on its next slice of rescue funding but has balked at labor market reforms demanded in exchange for the money. Greece is currently drawing on its third bailout worth up to 89 billion euros that ends in 2018.
In a quarterly report, the Budgetary Office warned that Greece could be headed for a fourth bailout if asks for more funding after the third loan program expires. This means that the country will be under more pressure to complete painful reforms and cutbacks.
“After 2018, Greece will need to borrow money to cover its needs otherwise stop meeting its obligations. This money could be found from the markets, if it has managed to borrow from the markets, or from the European stability Mechanism, (ESM). This is what makes the closing of negotiations more difficult, given the different approaches from the IMF, EU and the Greek government,” said the report.
“Obviously, a new request in 2018 for a loan from the ESM will come with a new fourth bailout,” it added.