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Greece bailout exit later, not sooner?

Friday, December 05, 2014 - 02:07

Euro zone ministers may prolong Greece's unpopular bailout programme by another six months, according to a document obtained by Reuters, but Athens says it would only consider an extension of a few weeks. David Pollard reports.

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Athens sees red again. This time demonstrators demanding the release of a jailed anarchist where, more usually, protesters vent their anger at austerity. Greece's bailout programme is seen as a widely-hated part of the deprivation of the past few years. Only this week, opposition leader Alexis Tsipras was playing on that in a pledge to voters to swiftly scrap the bailout and replace it with his own party's programme. (SOUNDBITE) (Greek) GREEK OPPOSITION LEADER ALEXIS TSIPRAS SAYING: "With this program we will replace the failed austerity policies of the bailout, from the first days of our government, before and regardless of the outcome of the negotiations" Those negotiations are between Greece and its lenders. The Greek government was bidding for an exit bailout by the end of the year. But talks have got bogged down by a row over a budget shortfall next year. Now, it's reported, Greece and its hard-pressed people may have to confront another possibility: its bailout will be extended for six months. According to a document shown to Reuters, that's something being mulled over by euro zone ministers. In part, that's because a standby credit line won't be ready in time. Robert Kuenzel of Daiwa. SOUNDBITE (English) ROBERT KUENZEL, DIRECTOR, EURO AREA ECONOMIC RESEARCH, DAIWA CAPITAL MARKETS EUROPE; SAYING: ''The precautionary stand-by arrangement seems to have been the preferred option, certainly for the Eurogroup. And I think that for some domestic political reasons maybe Greek politicians would have preferred to have that clean exit. But maybe this sort of stand-by arrangement balances a slightly less intrusive form of monitoring and surveillance with the need to continuously reassure markets that despite some political issues on the horizon in Greece, the Greek economy is not completely going it alone just yet.'' The Greek government says it hasn't received a proposal for an extension. If it were to happen, it could cast a shadow over February's presidential election. That, in turn, is seen as a possible trigger for a general election. In the meantime, the Greek parliament is due to vote on the contentious 2015 budget on Sunday.