Mr. Weber’s comments will likely fuel a debate in Germany and elsewhere in Europe over the wisdom of extending heavily indebted Greece a bailout without a fuller understanding of the country’s long-term capital needs. If Greece does receive a bailout, its access to capital markets would likely be severely curtailed, leaving it dependent on aid for the foreseeable future, economists say.
The Greek economy is under severe pressure due to austerity measures aimed at curbing government spending to bring down the deficit. Athens, which has said its total borrowing needs this year are in the range of €50 billion to €55 billion, is expected need a similar amount in 2011 and possibly more in 2012. A European Union-International Monetary Fund delegation was scheduled to arrive in Greece on Monday to discuss details of a possible rescue plan. However, with the cloud of Icelandic volcanic ash blocking much of Europe’s airspace, that trip was pushed back to Wednesday, dragging out the rescue-approval process for Greece still further and weighing on the euro.