Greece May Need Two More Aid Packages Says ECB’s Coene

September 11, 2013, 3:40 a.m. ET

Greece May Need Two More Aid Packages Says ECB’s Coene

Comments Add to Rhetoric Building the Case for More Aid to Greece

LAURENCE NORMAN

BRUSSELS—Greece’s official lenders could need to step in twice more to help the country as it very slowly recovers from its economic crisis, Luc Coene, the president of Belgium’s National Bank, said in a radio interview Wednesday morning. Asked whether Greece’s euro zone partners will need to prepare a third aid package for Greece, Mr. Coene, who is also a European Central Bank Governing Council member, said there will need to be at least one more package of support.“It’s clear that we are not…at the end of the Greek problem for the moment. We will have to make some extra efforts—certainly once, perhaps twice—we will see how the situation evolves,” he told Belgium radio station RTBL.

Mr. Coene said that Greece is seeing an improvement in its economic situationbut it is “very slow” and it will take “a lot more time” to sort out Greece’s problems. However, he said the challenges in Greece no longer place the “whole edifice” of the euro zone at risk.

While it isn’t clear whether Mr. Coene was referring to two future separate aid packages for Greece or different ways to address the country’s cash shortfall and still too-high debt, his statement adds to a buildup of rhetoric building the case for more aid to Greece.

There has been broad recognition that the euro zone will have to stump up extra money to help Greece overcome a financing gap toward the end of the year with German Finance Minister Wolfgang Schäuble admitting last month a third bailout will be needed.

Greece is drawing on a €200 billion bailout from the euro zone and a €40 billion package from the International Monetary Fund. A team of international experts from the troika of supervising institutions—the European Commission, the European Central Bank and the IMF—are due in Athens later in September to check on progress.

Speaking around five years after the collapse after of Lehman Brothers, Mr. Coene also said the financial situation was “much better armed” to prevent another crisis and to absorb the shocks of one if it did happen.

“A crisis can always happen again because we can’t control 100% all the elements of the financial system,” he said. “But I think we are now much better armed to prevent it and above all to absorb the possible shocks that could be caused.”

Mr. Coene said the banking system has much more liquidity and a much stronger capital base than before the crisis.

He was particularly upbeat on the Belgian system, saying the banks here have undergone “a very great transformation” since the crisis.

He said there is now very little speculative activity by Belgian banks and that the domestic bank system is one of the few in the region to maintain solid levels of lending to the business community.

“The sector has continued to carry out its role—that’s to say to give credit to the Belgian economy,” he said.

Mr. Coene also said that if the French and Belgian governments stick to their plan of gradually winding down Dexia Bank, the two governments will over time reduce the losses they absorbed by stepping in to stave off the bank’s collapse.