Greek PM does not rule out 'some form of financial assistance'
Greece's Prime Minister Lucas Papademos said on Friday the country was making every effort to avoid a third bailout package but said he could not rule out the need for one.
"Some form of financial assistance might be necessary but we have to work intensely to avoid such an event,» Papademos said in an interview in Italy's Il Sole 24 Ore.
He said Greece might find itself in a position of not being able to access markets even if all the measures agreed upon are fully implemented.
"It is difficult to foresee market conditions and expectations in 2015,» he said.
Papademos said Greece leaving the euro would have devastating consequences.
"The return of the drachma would trigger high inflation, exchange instability and a fall in the real value of bank deposits,» he said. [Reuters]
Greece to cut spending by 12 bn euros by 2014, PM says
"In 2013-2014 a reduction in state spending of about 12 billion euros is required under the new economic program,» Papademos told lawmakers in response to parliamentary questions.
"Every effort must be made to limit wasteful spending and not to further burden salaries of civil servants,» he said.
Greece pledged in 2010 to slash its soaring public deficit in return for a first EU-IMF bailout of 110 billion euros ($146 billion).
From over 15 percent in 2009, it aims to bring the deficit to below the EU limit of three percent by 2014.
Athens drew 73 billion euros from that rescue until December before a second eurozone lifeline of 130 billion euros was set up, including some funds left over from the previous package.
Earlier this month, Papademos oversaw a major operation to cancel part of Greece's near and mid-term debt in agreement with private creditors.
More than 94.8 billion euros' worth of debt issued under Greek law was erased on March 12, and a second operation for debt issued under foreign law will take place next month.
The country is expected to hold early elections in May after the debt swap has been completed.
Overall, Greece will receive 185 billion euros in loans until 2015, by which point EU officials hope its economy will be strong enough to enable it to borrow from money markets at affordable rates.
But the prospect of yet another lifeline has not been ruled out altogether.
Speaking to Italian daily Il Sole 24 Ore on Friday, Papademos raised the possibility of a third bailout but said he would do everything to avoid it.
"It cannot be excluded that some financial support may be necessary, but we must try hard to avoid such an outcome,» said Papademos, who came to power last year as the head of a caretaker coalition government.