EU mulls new loans to Greece to buy back bonds

The European Commission yesterday said it is considering a new loan from the European Financial Stability Facility (EFSF) to Greece to help the country tide over the financial crisis.

Greece, which secured a  €-billion ($150 billion) international bailout last May, before the creation of the emergency bailout fund, would use the money to buy back its own debt, which could be done at cheaper prices.

Such a plan is ''on the table,'' said Amadeu Altafaj, the spokesman for EU economic affairs commissioner Olli Rehn.

Earlier, Greek finance minister George Papaconstantinou admitted at the World Economic Forum in Davos that such discussions were taking place.

''We believe it is important, that it is urgent to come up with a comprehensive response to all these aspects, including those you mention,'' Papaconstantinou told reporters.

''You cite a possibility that is on the table,'' Altafaj said, adding that Rehn was in contact with Papaconstantinou.

French Finance Minister Christine Lagarde also said European leaders are discussing the possibility of the EFSF buying back national bonds, without naming Greece.

The loan is expected to be given for a period of 30 years.