German Finance Ministry Backs Bridge Loan for Greece

August 7, 2015 Share Print 0

Germany’s Finance Ministry favors a bridge loan for Greece to give Athens and its creditors sufficient time to negotiate a comprehensive third bailout, the Sueddeutsche Zeitung daily reported on Friday.

“A program that should last three years and be worth over 80 billion euros needs a really solid basis,” the paper quoted a ministry source as saying. “A further bridge loan is better than just a half-finished program.”

Greece is in negotiations with the European Union and International Monetary Fund for as much as 86 billion euros ($94 billion) in fresh loans to stave off financial ruin and economic collapse.

A 3.5-billion-euro debt payment to the European Central Bank falls due on Aug. 20 and without a bailout deal, Athens would need bridge financing.

The reported German preference for a bridge loan contrasts with the view of Greek Prime Minister Alexis Tsipras and French President Francois Hollande, who said on Thursday a new bailout should be agreed by late August.

via Reuters

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.