New Greek Bailout Would Put Most Debt With EU, IMF, Report Says
A second financial aid package for Greece would mean that European Union taxpayers, the European Central Bank and the International Monetary Fund would hold 64 percent of the country’s sovereign debt, according to research group Open Europe.
As much as 250 billion euros ($359 billion) of Greek debt could be held by those lenders in 2014, up from 85 billion euros at the start of this year, the London-based research institute said in an e-mailed statement today.
The study underlines the risks EU governments and the IMF are taking as they contemplate offering more support to Greece, which is the euro area’s most-indebted nation. Greek Prime Minister George Papandreou today faces a confidence vote as he struggles to convince lawmakers to accept austerity measures that are part of a 78 billion-euro aid deal.
“Taxpayer-backed loans are gradually replacing private- sector exposure,” Open Europe said. “The cost of a Greek default to the European economy will only increase with time.”
EU member states have a total exposure to Greece of 331 billion euros, including the debt held by their banks on top of government loans and ECB holdings, Open Europe said. France and Germany account for about half of the total.
To contact the reporter on this story: Mark Deen in London at markdeen@bloomberg.net
To contact the editor responsible for this story: Matthew Brockett at mbrockett1@bloomberg.net
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