Third bailout for debt-laden Greece 'inevitable', Eurogroup chief concedes as crisis rears its head again

The highest ranked official in the eurozone last night said it was ‘inevitable’ that Greece will need a third bailout to save it from collapse.
Jeroen Dijsselbloem, president of the powerful Eurogroup of finance ministers, became the latest senior figure to concede that the debt-riddled country will need further aid next year.
Greece has already received £205billion of emergency funds in two separate rescue packages but it is feared it will not be enough to plug the hole in the nation’s finances. ‘The problems in Greece won’t be solved in 2014 so something more will have to happen,’ said Dijsselbloem, who is also Dutch finance minister.

Flying the flag for a bailout: Debt-laden Greece has already received £205billion in emergency funding

It overshadowed a surprisingly upbeat survey showing private sector activity in the eurozone picked up this month despite a deepening slump in France.
Dijsselbloem’s comments followed a week of startling admissions over the true state of the Greek economy more than three years after its first £90billion bailout.

 

Wolfgang Schaeuble, Germany’s finance minister, set the balling rolling by declaring that Greece will need yet more emergency aid to keep it afloat.
Former Greek finance minister George Papaconstantinou also said ‘there could be a need for another bailout’ while Olli Rehn, European Commissioner for Economic and Monetary Affairs, refused to rule out a third rescue deal. Talk of a new deal for Greece sent shockwaves through Europe and made a mockery of claims by senior officials in the eurozone that the single currency crisis is finally over.
Jose Manual Barroso, the head of the European Commission, provoked scorn early this year by claiming the euro was out of the danger zone. And Francois Hollande, France’s Socialist president, this summer declared: ‘The crisis in the eurozone is over.’
Renewed concerns over the future of the single currency this week were enough to prompt Jens Weidmann, head of the German Bundesbank, to warn a break-up of the eurozone would have ‘grave consequences’.
Greece remains trapped in its sixth year of recession and unemployment has soared to record levels. Hopes that the eurozone is stabilising were bolstered, however, by figures showing business output rose at its fastest rate since June 2011 this month.
Markit said its index of activity in the private sector, where 50 is the cut off between growth and decline, rose from 50.5 in July to 51.7 in August.
Germany clocked up a score of 53.4, its best for seven months, but the French reading slumped to 47.9 in a further blow to Hollande. ‘It is too soon to sound the all-clear for the euro crisis,’ said Erik Britton, director at Fathom Consulting.