EU could extend Greek bailout into middle of 2015

Eurozone ministers are considering extending the Greek bailout, due to end this year, by six months to the middle of 2015, to allow Athens more time to comply with the conditions for the disbursement of the remaining money.

But extending the programme beyond a few weeks into the new year would complicate prime minister Antonis Samaras’ efforts to secure victory for his preferred candidate in a presidential vote in February since he has staked his chances on exiting the EU/IMF bailout by the end of the year, when funding from the EU is due to end.

An extension of the bailout, under which Athens will have received €240 billion since 2010, is necessary because international lenders and the Greek government are still negotiating what Athens must do to get the remaining €1.8bn and secure a back-up credit line for after the bailout ends and Greece returns to market financing.

Athens needed to wrap up its bailout review by a meeting on December 8 of eurozone ministers to meet the timeline for exiting its bailout by the end of the year. But the talks have been held up by a row over a budget shortfall next year, and a senior eurozone official said Greece would have to ask for an extension on its bailout because a credit line to replace the programme will not be ready in time.

A technical extension would also allow the release to Greece of €1.9bn of profits made by the ECB on its purchases of Greek bonds and the disbursement of another tranche of €3.5bn from the IMF’s bailout for Greece.