Tags: EU | Greece | Financial | Crisis

ECB's Weber Denies Saying Greece Needs More Aid

Wednesday, 21 Apr 2010 07:26 AM

ECB Governing Council member Axel Weber denied reports that he had said Greece might need as much as 80 billion euros ($107.7 billion) in aid in the coming years to avoid default.

Weber said he had simply referred to a provisional figure for a three-year period quoted by the Greek Finance Ministry which had since been revised, and his comments had been misinterpreted.

"I have said that long-term liquidity needs are difficult to assess," Weber said after a speech at the ZEW institute.

The Wall Street Journal reported earlier on Tuesday that Weber had told German legislators Greece may require assistance of up to 80 billion euros.

But Weber said Greece's long-term liquidity needs depended on many factors, and he could therefore not give a specific figure for them.

German newspaper Bild said Weber had warned that the total amount of aid Greece requires may not be known until later, drawing a parallel with the case of nationalized German property lender Hypo Real Estate in 2008.

Euro zone leaders agreed a giant EU/IMF fall-back aid package for Greece earlier this month. The move, however, has failed to quell market concerns.

The euro weakened 0.33 percent on Tuesday to $1.344 as concerns about Greece's fiscal situation increased.

The yield spread between Greek and German 10-year bonds widened to 489 basis points, a euro lifetime wide, versus 468 basis points at Monday's settlement close, according to Tradeweb. (One basis point is equivalent to 0.01%, or one-hundredth of a percentage point.)

Germany unveiled further details to the aid plan on Tuesday. The country's deputy finance minister, Joerg Asmussen, said the euro zone would provide help to Greece in the form of pooled loans, while the idea of buying Greek bonds has been definitively ruled out.

"If it comes to financial aid for Greece, then the path will be a pooled credit, which in the case of Germany would be done via (state bank) KfW," Asmussen told reporters. "The solution of buying Greek bonds is off the table."

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ECB Governing Council member Axel Weber denied reports that he had said Greece might need as much as 80 billion euros ($107.7 billion) in aid in the coming years to avoid default. Weber said he had simply referred to a provisional figure for a three-year period quoted by...
EU,Greece,Financial,Crisis
334
2010-26-21
 

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