Fears surface over possible second bailout for Greece

Greece may need to be bailed out by its eurozone peers for a second time amid concerns the country might not be able to access the capital markets to meet its refinancing obligations.

The worries surfaced at the weekend after the euro fell by nearly 1 per cent and the cost of insuring against Greece defaulting on its debts rose to a record high on Saturday after a report that the country was considering pulling out of the eurozone.

Prime Minister George Papandreou denied the suggestion, saying: "No such scenario has been discussed."

Yesterday, British Chancellor George Osborne suggested Greece might need more help, although he denied it would necessarily be forced to resort to defaulting on its debts.

"I think it is inevitable that we are going to look at the Greek package and see what they can do to get through the next year, but that might involve additional assistance from, for example, the eurozone," he told the BBC, admitting that the markets were sceptical about the country's refinancing abilities.

He said Britain would not want to be involved in another rescue. "We certainly don't want to be part of ... a second bailout of Greece."

His comments came after finance ministers from Germany, France, Italy and Spain met in Luxembourg on Saturday to discuss the Greek debt crisis.

The meeting was also attended by Greek Finance Minister George Papaconstantinou, European Central Bank president Jean-Claude Trichet and Olli Rehn, the European commissioner for economic and monetary affairs.

Jean-Claude Juncker, the head of the group of eurozone finance ministers, said Greece's exit from the single currency was not discussed, calling it a "stupid idea".

- INDEPENDENT