Greece seeks two-year extension to bailout package

Greece is seeking a two-year extension to its austerity programme from the European Union and IMF as it struggles to find room for another €11.5bn of spending cuts.

Markets are expected to receive the news badly after a relatively calm period for the eurozone so far this summer. The debt-ridden nation wants to spread the cuts over the next four years, rather than implement them in 2013 and 2014, and also wants to postpone the start of repayments of its first loan to the EU and IMF from 2016 until 2020. The extension would mean Greece's budget deficit would decline by 1.5 percentage points rather than 2.5 percentage points under the present arrangement and it would need to raise an additional €20bn, according to the FT. However, Antonis Samaras...