Greece

Greece will need to pass fresh budget cuts next year to hit the targets set by its international creditors, a senior European Central Bank official said Monday, setting the stage for another clash with Athens over how much austerity the country can bear, The Wall Street Journal reported. ECB executive board member Jörg Asmussen, appointed last year from the German Finance Ministry, also said Greece's international creditors will need to do more to cover the country's financing needs, starting from mid-2014.

The International Monetary Fund proceeded with its record 2010 bailout of Greece despite deep internal divisions over whether it would work, according to confidential documents that contradict the fund's public statements, The Wall Street Journal reported. The new details of the rift come as the crisis lender is now pressing European governments to forgive some of the country's debt in a fresh round of difficult talks. The idea is unpopular with Germany and other European nations because their taxpayers would take the hit.

The head of the euro zone's bailout fund has cast doubt on official assessments of how much Greece's debt is really weighing on its economy, in the latest signal that the currency bloc is stepping away from commitments to reduce the country's debt mountain.

While Greece's lenders are on firmer footing after getting capital from euro-area and International Monetary Fund bailout funds, they still need to reduce the non-performing loans that have tripled to 29 percent of the total in three years and threaten their new-found solvency, Bloomberg reported. One obstacle is a five-year ban on foreclosures that prevented thousands of Greeks from losing their homes after the economy went into free-fall. The government is now considering a plan to ease the restrictions by the end of this year to satisfy its creditors’ demands.

Greece's official lenders could need to step in twice more to help the country as it very slowly recovers from its economic crisis, Luc Coene, the president of Belgium's National Bank, said in a radio interview Wednesday morning, The Wall Street Journal reported. Asked whether Greece's euro zone partners will need to prepare a third aid package for Greece, Mr. Coene, who is also a European Central Bank Governing Council member, said there will need to be at least one more package of support. "It's clear that we are not…at the end of the Greek problem for the moment.

Prime Minister Antonis Samaras of Greece seized on new economic data on Saturday that indicated the country was on track to economic recovery and promised relief to Greeks weary of years of punishing austerity, the International Herald Tribune reported. “Greece is turning the page,” Mr. Samaras told politicians and entrepreneurs at an annual international trade fair in the northern port of Thessaloniki, traditionally used by Greek prime ministers to outline their government’s economic policy for the coming year. “There will be no more austerity measures,” he said.

When interest rates tumbled following Greece’s entry to the euro, a beachfront apartment or village house with a vineyard suddenly became an affordable investment for middle-class city-dwellers. But a second-home boom fuelled by easily available mortgages turned to bust as the country collapsed into recession, leaving a trail of unfinished buildings, bankrupt local contractors and cash-strapped owners unable to keep up with monthly payments, the Financial Times reported. A blanket ban on foreclosures on properties whose owners owe less than €200,000 is set to expire in December.

Euro zone officials are considering a big overhaul of Greece’s sputtering privatisation programme that would move most of the state-owned real estate intended for sale into a Luxembourg-based holding company managed by foreign experts, the Irish Times reported.

Greece may need a further €10bn in extra support from its eurozone partners but would not expect any loan to come with conditions attached, its finance minister told Proto Thema newspaper on Sunday, the Financial Times reported. Athens faces a funding gap of about €11bn in 2014-15 after its current bailout programme ends in the first half of next year and its eurozone partners have pledged additional support until it can tap markets again. “If Greece needs further support, it will be around 10 billion euros,” finance minister Yannis Stournaras told the paper.

The need for a new rescue programme for Greece promises a drawn-out drama of late-night negotiations but is unlikely to trigger the sort of crisis that has threatened the breakup of the euro in the recent past, Reuters reported. That the collapse of the single currency is no longer an immediate danger reflects the solidity of the political bargain that saved Greece a year ago. Then, Germany, the euro zone's paymaster, agreed to keep aiding Greece so it could stay in the euro as long as it continued to tighten its belt and implement reforms to restore competitiveness.