ECB's Asmussen calls for a 2-year funding extension on Greece

FXstreet.com (Barcelona) - Joerg Asmussen, member of the European Central Bank, told German broadcaster ZDF over the weekend, EU leaders should agree on a 2-year loan extension for Greece, with any additional funding plan to be decided at a later stage, confirming the broadly-held view within the EU of 'kicking the can down the road', a position not marrying too well with IMF Director Christine Lagarde, who has been repeatedly calling for a long-standing comprehensible plan.

Reuters quoted Joerg Asmussen, cited by German broadcaster ZDF, as saying: "We should next week settle the financing for the years 2013 and 2014, but you have to be honest and say we do not really expect the country to have access to markets in 2015 and 2016; that means a follow-up programme would be necessary."

In an exclusive interview for Reuters, Ms. Lagarde said she remains driven by two objectives. Firstly, "to build and approve a program for Greece that is solid, that is convincing today, that will be sustainable tomorrow, that is rooted in reality and not in wishful thinking." Secondly, "to maintain the integrity, credibility and quality of advice that we are giving, not for the Fund itself, which obviously is a concern of mine, but to lend that to the Europeans because that is what they are interested in."

Meanwhile, German Finance Minister Wolfgang Schaeuble told German-based ARD television, the time to find a common approach has come, and it has to be on Tuesday. "We are working intensively, and I think that we will manage it" he said.

Despite the fact that Greece passed yet another austerity bill through parliament earlier this month, the depression the country is trapped into makes it difficult to think that a previously agreed disbursement of funds will be enough, and market headlines are starting to speculate that another round of debt haircuts - losses on creditors - is necessary in order to maintain the Greeks in life support for a bit longer, and avoid to exacerbate its dire economic situation.

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