May 7, 2011
European nations may provide more aid to Greece, recipient of the first euro-area bailout, as it struggles to reduce a debt load that some investors say will lead to a restructuring.
“We think that Greece does need a further adjustment program,” Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, said after an unscheduled meeting of European Union officials last night in Luxembourg. “This has to be discussed in detail” at this month’s gathering of finance chiefs, he said.
Greek bonds have tumbled since mid-April when Portugal became the third euro nation to seek a rescue and German officials indicated they wouldn’t oppose a restructuring. Greece denied a report in Germany’s Spiegel magazine yesterday that said it threatened to withdraw from the euro.
“We’re not discussing the exit of Greece from the euro area. This is a stupid idea -- no way,” Juncker told reporters. “We don’t want to have the euro area exploding without any reasons.”
Greece has already received an extension on bailout loans this year and policy makers in Athens say another lengthening would help avoid a broader restructuring. The additional aid may involve increasing the 110 billion euros ($158 billion) agreed to in last year’s rescue or enabling the EU’s aid fund to buy back Greek debt, in addition to easing payment terms, a European official said after the meeting.
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