Europe Economy

Greek Rescue Could Happen over the Weekend: UBS


An aid package for Greece could come as early as this weekend, as the Balkan country is in danger of running out of cash, analysts at UBS wrote in a research note Friday.

The Parthenon in Greece
Scott E. Barbour | Getty Images

Greece would need to issue around 30 billion euros ($40 billion) to cover its financing needs in the second quarter, when it must make the bulk of its payments on government debt, the UBS analysts said.

Spreads between yields on Greek bonds and German bunds narrowed slightly on Friday after hitting the widest in euro lifetime Thursday, but market jitters over Greece's ability to pay its debts continued.

Greece will auction 1.2 billion euros in 6-month and 1-year treasury bills next Tuesday, the country's public debt agency announced earlier Friday.

The country's Finance Minister George Papaconstantinou said Greece does not intend to use the aid mechanism agreed upon by the European Union and the International Monetary Fund last month.

But UBS analysts wrote that, given the markets' reaction to Greece's continuous woes, activating the rescue package was probably "a question of days."

"An IMF solution is probably the best one: it would avoid diplomatic drama from the EC and increase the credibility of the measures taken," they wrote.

"A solution over the weekend is possible."

The country plans to issue between $5 billion and $10 billion in dollar-denominated bonds, with a roadshow due to start on April 20, according to various reports.

Greek debt agency officials refused to comment when asked by about the effects of the market jitters on future plans to issue debt.