Greece is 'likely to need third bail-out'

A third bail-out for Greece cannot be ruled out, a senior European Central Bank (ECB) official said, as the country's troika of lenders prepared to rubber-stamp its €130bn (£109bn) second financial rescue.

 Germany's Wolfgang Schaeuble said it would be a 'big mistake to give the impression that the crisis has been resolved' and warned Greece must make good on austerity promises.

Greece concluded a complex debt restructuring with private sector creditors on Friday, leading to the declaration of a "credit event" that will trigger about €3.5bn of credit default insurance payouts.

There were doubts over the exact impact of the credit default swaps, as Austria said it would need to inject up to €1bn into a state-owned bank as a result.

Even as ECB policymaker Ewald Nowotny hailed Greece's debt restructuring a "clear success", he today admitted a third aid package was a possibility.

"You have to see this very realistically," he said. "It would be negligent to rule such a thing out completely but I don't see any need for this at the moment."

Alastair Winter, chief economist at Daniel Stewart & Co, said he was certain a third bail-out would ultimately be needed. "I don't see how they can possibly return to the capital markets in 2015," he said.

French President Nicolas Sarkozy was an isolated voice in declaring the Greek problem "solved", with German finance minister Wolfgang Schaeuble saying "It would be a big mistake to give the impression that the crisis has been resolved" and warning Greece must make good on austerity promises.
The Greek prime minister's top economic adviser, Gikas Hardouvelis, said Greece hoped to get €1bn financing from the European Investment Bank (EIB) this year as a stimulus for its ailing economy.