The British Chancellor of the Exchequer George Osborne has warned that Greece may need additional bailout funding, but that the U.K. is unlikely to contribute to any such payouts.
We certainly don't want to be part of any bailout of Greece, a second bailout of Greece, Osborne told the BBC.
Osborne said Greece has to face several difficult questions about how it can borrow money from the markets, which are skeptical about the country's ability to repay loans.
[However], I certainly don't think it's inevitable that Greece is going to default, Osborne said.
I think it's inevitable that we are going to look at the Greek package and see what they can do to get through next year, but that might involve additional assistance from, for example, the eurozone.
The Chancellor added: “I suspect a lot of my time over the next few weeks is going to be with other European finance ministers and others talking about how we try and help the Greeks get through this situation.”
Osborne’s gloomy comments came after swirling rumors that the Greek government was seeking to exit the euro (since denied by Athens officials) and an emergency meeting by eurozone ministers on Friday over the financial crisis in Greece.
At that meeting in Luxembourg, Greece reportedly asked its eurozone benefactors to reduce the country’s deficit targets as it grapples with a difficult austerity budget.
Over the weekend, the Greek finance minister George Papaconstantinou said his country may consider the possibility of having a European bailout fund purchase its debt if Athens cannot access capital markets next year.
The markets continue to disbelieve in our country, Papaconstantinou told media. We have to plan our next steps for 2012, for 2013.
It was precisely one year ago that Greece received a 110-billion euro bailout from the European Union/International Monetary Fund to finance its massive deficit.
(Britain did not contribute to that bailout either).
Since that time, Ireland and Portugal have also signed up from similar loans.
Regarding Portugal, Osborne said Britain was a reluctant participant in that particular bailout.
I didn't sign up to that approach. It was something signed up to by my predecessor, he noted.