Austria's Fekter takes hard line on more Greek aid

1 of 2. Austrian Finance Minister Maria Fekter speaks to journalists during an interview in the western Austrian village of Alpbach August 28, 2013.

Credit: Reuters/Dominic Ebenbichler

By Michael Shields

ALPBACH, Austria | Wed Aug 28, 2013 6:07pm BST

ALPBACH, Austria (Reuters) - Greece must meet terms of its existing international bailout before it can hope for any more external aid, Austrian Finance Minister Maria Fekter said on Wednesday, taking a hard line before Austrian national elections next month.

"Before it comes to additional help, I will surely demand compliance with the (existing programme's) terms," she told Reuters in an interview.

She declined comment on the potential extent of more aid until international lenders get a report back on how well Athens has met current loan terms, noting Greece was well behind its original target to raise 50 billion euros via privatisations.

German Finance Minister Wolfgang Schaeuble has said an estimate by the International Monetary Fund that Greece will need an additional 11 billion euros to see it through to 2015 was "not completely unrealistic".

Schaeuble provoked a storm last week when he said more explicitly than before that Greece would need a third bailout, going much further than Chancellor Angela Merkel had done. The government then sought to play down his remark.

Fekter, a conservative hardliner under fire from opposition parties for euro zone bailouts before elections on September 29, would not comment on the 11 billion figure or say whether Austria could accept a writedown on Greek sovereign debt as a way to give Athens more breathing room.

"I will not comment on that because that is fantasising about something that is not now on the table," she said.

Fekter said the summer months appeared to mark a turning point for the fortunes of the broader euro zone economy even though some countries still faced difficulties.

"In Italy we have a strong north/south divide but this is nothing new. There have to be structural reforms here to narrow this divide," she said.

Asked about neighbouring Slovenia's delays in setting up a "bad bank" to handle toxic assets in its financial sector, Fekter said the former Yugoslav republic had so far managed to resolve on its own the sector's problems.

"The Slovenians - at least the finance minister - have the will to reform. We will see if he gets this through. It is good for us as a neighbouring country if Slovenia can achieve on its own stability in its financial sector again."

Asked if she were optimistic Slovenia could manage without resorting to outside help, she said:

"We will of course support the Slovenians as much as possible. So far they have done well at crisis management."

(Reporting by Michael Shields; editing by Stephen Nisbet)

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