Politico EU: Greece approaches World Bank for cash

By BJARKE SMITH-MEYER/

Greece’s €86 billion bailout package could soon become even more complicated, after the country’s government decided to seek an unknown amount of “financial assistance” from the World Bank, according to POLITICO sources.

If accepted, the Greek request would plunge the country into further debt, at a time when the government continues to battle over the terms and conditions of its current bailout package. Negotiations resumed this week in Athens between the government and its eurozone creditors, the European Commission, International Monetary Fund, and European Stability Mechanism.

A failure to complete the so-called “second review” of the package could prompt European creditors to withhold additional rescue funds from the Greek government, which faces major debt repayment deadlines in the coming months. A Greek default in turn could reignite the debate about whether the country should be kicked out of the eurozone.

Greece’s current creditors “are not too happy about” the fresh request for funds, an EU official said Thursday.

Nonetheless, Greece’s heavily indebted government has decided to ask for more loans, this time from the World Bank, which specializes in providing funds to impoverished countries and emerging economies.

“The government of Greece has asked the World Bank to provide technical and financial assistance to address pressing challenges including: long-term unemployment, economic competitiveness and growth and social protection,” a spokesperson from the World Bank said in a statement. “In accordance with World Bank procedures, any final decision on providing loans would be subject to approval by the bank’s board of executive directors.”

The World Bank declined to specify how much money Greece requested.

“Preliminary talks have taken place indeed with [the World Bank] but we cannot confirm official application,” a government source in Athens said.

Source: Politico EU