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Does Greece need a THIRD bailout?

Prepare to repeat Greek negotiations: Strategist

Even before the ink was dry on the extension of its current bailout program, speculation is growing that embattled Greece is on the verge of asking for yet more cash.

"The Greek need for a third program is extremely high," Carsten Brzeski, a senior economist at ING told CNBC via email. "There will be new negotiations. And these negotiations will be tough."

Greece received its first slice of aid in 2010 with a 110 billion euro ($123 billion) rescue package. Its second program brought the bailout total to 240 billion euros ($272 billion) and the deadline for repayment was extended this week - for another four months - on the premise that Greece's government will make a renewed push for economic reforms. Unlike other euro zone members like Ireland and Portugal, Greece still requires financial aid due to its hefty debt burdens.

$30 billion more?

Newly appointed Greek Finance Minister Yanis Varoufakis attends a hand over ceremony in Athens, January 28, 2015.
Marko Djurica | Reuters

Speculation that it could ask for more bailout money has mainly been sparked by the German media. Talk of a third program has been around for months - if not years - but has returned to the limelight this week after negotiations for its current extension became so fraught.

News organization MNI (Market News International) reported Thursday that Greece's creditors have been mulling the "possibility" of a third package for several months, citing a top euro zone official. Its source also said that this possibility had now increased in anticipation of higher deficits and weaker growth due to the turmoil of the country's recent snap election. The news flash was actually credited with sending the euro lower on Thursday afternoon, although other analysts attributed the move to fresh economic data from the U.S.

The figure being bandied around is another 30 billion euro loan for Greece. German news publications Rheinische Post and Frankfurter Allgemeine Zeitung have both run headlines this week discussing the likelihood of another rescue package and have quoted top economists and lawmakers from the country.

Disgruntled taxpayers

Greek ideas are 'unsettling' German business

Michael Fuchs, the deputy parliamentary floor leader of Chancellor Angela Merkel's CDU party, told CNBC said another round of financial aid would be very difficult.

"That really depends on the Greek government. They have to come up with serious proposals," he said. "(Greece needs to show us) that they are capable of really changing the situation."

Germany is traditionally known as the powerhouse of the euro zone and the German taxpayer has shown signs that they are more than a little reluctant to continue to bail out struggling euro zone nations.

Almost three-quarters of Germans doubt that the Greek government will implement the announced austerity measures and reforms, according to a new survey Thursday by Polit Barometer. An INSA poll this week also showed that only 21 percent of Germans back the current extension for Greece.

The German parliament voted in favor of the bailout extension on Friday. However, with the ground swell of dissatisfaction being shown in these polls, it might not be too long before the German politicians have to change tact.

'No peace agreement'

Varoufakis was 'insulting' to Merkel: German lawmaker

"The current compromise was a cease fire but no peace agreement," ING's Brzeski told CNBC.

"A lot of goodwill has been destroyed by the Greek negotiation strategy and it is completely open whether there will be (an agreement on) a third package or whether we could still see a 'Grexit' later this year."

Markus Kerber, the chief executive at the German Federation of Industry told CNBC that the reforms are needed in Greece for the Greek people and not just for its international creditors.

"Greece now has four months to show that the new government is willing to do the structural reforms in the country that we have been waiting for so long," he said.

"If this happens in the next four months than there could be signs of hope on the horizon."

Meanwhile, a second reading of gross domestic product for Greece on Friday morning showed the economy contracted 0.4 percent (quarter-on-quarter) in the last quarter of 2014.

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