Greece may need third bailout

European Central Bank Executive Board member Joerg Asmussen (R) and Greece Finance minister Yannis Stournaras speak during a press conference following their meeting at the Greek Finance ministry in Athens, on August 21, 2013.

Greece's finance minister announced that the economically blighted nation might need around $13 billion to keep itself afloat, setting up the possibility of a third bailout.  

Despite the nearly $320 billion that has poured into Greece in two previous bailouts, the Greek economy continues to get smaller. While some of its neighbors in the euro zone have clawed their way out of recession, the Greek economy shrank by 4.5 percent in the second quarter.

"Will it get the third bailout? A decision will be made in the fall, but the answer is probably yes," says Marketplace's Stephen Beard from London. "The cost of letting Greece go to the wall in terms of losses on its government bonds and the contagion effect are probably too horrendous for the rest of the euro zone -- and Germany, in particular -- to contemplate."

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...