Greece, struggling to escape a financial collapse, is de facto bankrupt and the eurozone was seeking ways how to minimise impacts and contagion on other members, Slovak Prime Minister Iveta Radicova said on Saturday. The euro area countries are discussing a new bailout package for Greece, which could include up to 30 billion euros from the private sector, but which will only flow after enacting spending cuts and tax hikes to cut its mountainous debt.
"Greece, de facto, is in bankruptcy," Radicova said in a debate on Slovak Radio. "Today, we are looking for ways how to minimise impacts from of fact on other euro zone members," she added. Radicova told Reuters in May that restructuring of Greece's debt would be inevitable at some point to cope with its mounting debt. Slovakia, the euro area's second poorest country which adopted the currency in 2009, rejected contributing to the first international 110 billion euro aid package last year, calling if a fake solidarity with richer and profligate peers.
Greece now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding. Radicova, leading a reformist government which has pledged one of the European Union's most ambitious austerity plans, reiterated Greece must do homework first to win confidence and unlock funds needed to avoid a fiscal catastrophe. European Central Bank policymaker Juergen Stark said on Friday that Greece's rescue package gives Athens a "last chance" in its debt crisis as aid programmes cannot be continued endlessly.