Greece will not need any more loans, declares PM

PUBLISHED : Wednesday, 01 January, 2014, 3:26am
UPDATED : Wednesday, 01 January, 2014, 3:26am


Greece will exit its EU-IMF bailout agreement as scheduled this year and will require no further loans, Prime Minister Antonis Samaras said.

"In 2014 we will make the big step to exit the loan agreement," Samaras said in a nationally televised address.

"In 2014 Greece will venture out to the markets again and start becoming a normal country.

"Greek debt will be officially declared viable, meaning there will be no need for new loans and new bailout agreements." Greece was first bailed out by the European Union, the International Monetary Fund and the European Central Bank for €110 billion (HK$1.17 trillion) in 2010.

When that failed, taking Greece dangerously close to exiting the euro zone, the country got a second rescue in 2012 worth €130 billion plus a private sector debt write-off totalling more than €100 billion.

The second bailout is set to end in the middle of this year, and there is strong belief that Greece's weakened economy will require more EU-IMF assistance.

The creditors are worried the country can not afford to meet its €4.4 billion loan repayments set for this year. The impending financial hole could rise to €10.9 billion by next year .

Greece is experiencing a sixth year of recession. However, the government expects slim growth to set in this year, alongside a small budget surplus not counting debt servicing costs.

Bailed out Ireland last month became the first euro zone nation to exit an EU-IMF rescue programme and head back to the markets for its government borrowing.

Ireland did so without maintaining some sort of credit line with the EU, IMF and the European Central Bank.

Despite widespread doubts, rescued Portugal said it hopes do the same when it exits its programme in May.