Bundesbank predicts fresh Greek bailout

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Greece will need a new bailout programme by the start of next year, according to an internal Bundesbank document reported by the German media.

Concerns that Greece will need a new aid package by 2014 have been repeatedly played down by the German government ahead of elections in September, anxious not to alarm German voters.

According to Der Spiegel , the Bundesbank document states that by the start of 2014, at the latest, the Eurozone will “most likely agree a new loan programme to Greece.”

The Bundesbank document also states that the risks of the current rescue programme are “extremely high”, the performance of the Greek government was “barely satisfactory” and there was “substantial doubt” about its ability to implement essential reforms.

In July, Greece secured further aid from the Eurozone on condition that it implemented reforms including cutting public sector jobs and improved the collection of tax revenue. The Bundesbank document suggested this aid was approved due to “political necessities.”

After private creditors were forced to take losses on their Greek debts, Greece’s main creditors are other countries in the eurozone including Germany. The costs of a further bail-out would be borne by European taxpayers.

Carsten Schneider, budget spokesman for the main German opposition party, the Social Democrats, said: “There will be a rude awakening after the election. The Chancellor is lying to people before the election when she denies that more aid is needed for Greece. This aid will lead to losses for the German taxpayer.”

Prominent economists including Marcel Fratzscher of the German Institute for Economic Research expect that Greece will soon need fresh aid. The current loan package from the EU and IMF is due to expire at the end of 2014.

A spokeswoman for the German finance minister Wolfgang Schaeuble said: “The current programme runs until 2014. At present there is no reason or need to change the programme.”

Bernd Lucke, of German euro-sceptic party Alternative fuer Deutschland accused the German government of deceiving voters.

“It is becoming increasingly clear that the Greeks will not be able to avoid a fresh aid package linked to a new debt haircut,” he said in a statement.