European Central Bank Executive Board member Joerg Asmussen said any proposal to give Greece more time means it will need more aid.
“As long as a country has a primary deficit,” giving it more time to meet its fiscal targets automatically means “that there is an additional external financing need,” Asmussen said at a panel discussion in Berlin today.
Greek election winner Antonis Samaras is seeking to build a coalition to keep aid flowing after key rival, anti-bailout party Syriza, rejected his offer to join a government. The vote forced Greeks, in a fifth year of recession, to choose open-ended austerity to stay in the euro or reject the terms of a bailout and risk the turmoil of exiting the union.
The so-called troika of representatives from the ECB, International Monetary Fund and European Commission will visit Greece as soon as a government has been formed, Asmussen said.
Greece’s primary deficit, which excludes interest payments, was 2.4 billion euros in the year’s first five months, down from 4.6 billion euros a year ago, the Athens-based Finance Ministry said June 12. The target was 4.2 billion euros.