Wednesday, June 1, 2011

Greece in Line for New Loan

Wall Street Journal
June 1, 2011

Discussions are under way for the European Union and the International Monetary Fund to grant Greece a fresh loan to bridge funding gaps in 2012 and possibly also 2013, said three sources familiar with the matter.

EU, IMF and Greek government officials have come to realize that Greece will need another injection of financial aid to cover financing needs, these sources said. The deal is expected to be concluded this month, with the loan volume seen at about €30 billion ($43.18 billion) for each year.

"There is no other option but a new loan for Greece," said one senior euro-zone government official who is directly involved in the talks. This person said it was still open whether the new loan would cover one or two years.

Also still undecided as of early Wednesday was a proposal, backed earlier by Germany, to ask for private investors to agree voluntarily to an extension of the life of Greek bonds maturing over the next few years, according to these sources.

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