Greek IMF rep sees bigger bailout

EU leaders agreed in July to provide Greece with a second bailout of more than 109 bn euros.

Greece’s borrowing needs will be higher than currently projected and governments or private bondholders will have to pick up the tab,the debt-laden country’s representative at the IMF said on Saturday.

EU leaders agreed in July to provide Greece with a second bailout of more than 109 billion euros ($147 bln) to help the country service its debt through to 2020.

Private bondholders were asked to take part in the rescue as part of a Private-Sector-Involvement (PSI),in which they would accept a 21 percent loss on their Greek debt portfolio.

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But Greece’s financing needs will be even bigger,the country’s representative at the IMF,Panagiotis Roumeliotis said in an interview in financial daily Imerisia.

The financing needs will be greater,mainly because of the bigger-than-expected recession (in Greece) and the outcome of the PSI,he said.

This financing gap will have to be covered either by increasing the 109 billion euro loan agreed on July 21 or through a restructuring of private debt,Roumeliotis added.

The IMF was supporting the second option in order to make Greece’s debt sustainable,Roumeliotis said. A deeper restructuring of Greece’s debt could involve a bigger haircut on the country’s bonds or an extension of its maturities,he added.

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