ECB in Athens as fresh bailout talk heats up

The European Central Bank was checking up on how well Greece is meeting its international bailout obligations on Wednesday, a day after Germany's finance minister said a third aid programme would be needed to keep Athens afloat.

Joerg Asmussen, a member of the ECB's executive board, was to meet Greece' prime minister, finance minister and central bank governor, and to have talks with Greek business leaders.

His immediate concern is with the next tranche of aid from Greece's second international bailout, due in October.

But his visit was announced the same day that German Finance Minister Wolfgang Schaeuble told an election campaign audience that Greece will need a third bailout on top of rescue loans worth about 240 bln euros already obtained for 2010-2014.

A Greek finance ministry official said any further help for Greece would aim to cover its funding shortfall in 2014-2016 and would be much smaller than the previous aid packages, given the country's limited funding needs for the period.

The IMF has put Greece's uncovered funding needs for 2014-2015 at 10.9 billion euros. At least part of that shortfall stems from national European central banks refusing to roll over part of the Greek bonds they hold.

Greek officials have suggested any such funding shortfall could be covered with a combination of new rescue loans, or debt support measures like extending maturities or cutting interest rates on loans, as already envisaged under a euro zone decision on Greece last year.

The aid programme Schaeuble is expecting will be at least partly financed via the EU budget, German newspaper Sueddeutsche Zeitung cited unnamed sources as saying.

Progress on reform in the recession-stricken country has been patchy. Tax revenues continue to lag targets and the economy has struggled to show signs of recovery after shrinking by about a quarter from its peak six years ago, mainly as a result of austerity policies imposed under two bailouts.