BERLIN (Reuters) - Greece will need even more financial support if it is given additional time to meet the fiscal targets set out in its EU/IMF bailout program, a European Central Bank policymaker said on Monday, putting the onus on governments to tackle the crisis.
ECB Executive Board member Joerg Asmussen also said it was still too early to withdraw the central bank's emergency support measures in view of the heightened tension in financial markets.
Euro zone officials have said the currency bloc might consider giving a new government in Athens some leeway on how it reaches its bailout targets. But Asmussen warned against doing so hastily and without a thorough evaluation of the situation.
"As long as a country is running a primary deficit, extending the fiscal targets will automatically mean that there will be an additional external financing need," he said in a panel discussion at an event organized by Germany's Green Party.
Asmussen was speaking a day after pro-bailout parties won a narrow victory in elections in Greece. That gave the euro and shares a brief rally on Monday, but did little to lessen concerns over Greece's ability to meet the terms of its bailout program.
Athens had to turn to the European Union and the International Monetary Fund for money after it was shut out of bond markets as its debt burden was viewed as unsustainable.
Under the current rules agreed with its creditors, it must cut its budget deficit to below 3 percent of GDP in 2014.
TOO EARLY TO EXIT
Asmussen said that the ECB's crisis support measures were not permanent and that the ECB was "conceptually and practically" prepared to end them.
"But in light of increasing tension in financial markets, it would be premature to start the exit," Asmussen said.
Asmussen added that the central bank's crisis measures could not replace the need for governments to consolidate budgets, make structural reforms and strengthen the banking sector.
Some governments, however, still expect the central bank to ride to the rescue and ease their path back to growth.
Spain's treasury minister on Monday urged the ECB to respond firmly to market pressures, implying it should buy Spanish debt after the country's borrowing costs rose to a euro-era high above 7 percent, seen as unsustainable in the long-term.
But the ECB has been reluctant to do so and has stayed out of the bond markets for the past three months.
Austria's central bank chief Ewald Nowotny urged politicians to have the courage to adopt structural change and cited the late June EU summit as a key date to show that. He said forming a banking union was one such idea.
"I think for the foreseeable future this notion of a banking union ... is probably the most relevant one and with three specific aspects," Nowotny said, referring to common banking supervision, deposit insurance and a bank resolution scheme.
(Reporting by Annika Breidthardt, additional reporting by Michael Shields in Vienna, writing by Eva Kuehnen; Editing by Hugh Lawson)