* Austrian finmin sees Greece with “cost-neutral” extension
* Says Spanish bank bailout to cost less than 100 bln eur
* Greece says no specific proposal on deficit targets
VIENNA, Sept 16 (Reuters) - Greece will get “a few weeks” more time to meet terms of its international rescue but will not get more money, Austrian Finance Minister Maria Fekter said in a newspaper interview released on Sunday.
She also said that Spain was likely to need far less than the up to 100 billion euros ($131.5 billion) originally earmarked for a bailout of its ailing banking sector.
The idea of giving Greece one or two more years to fulfil terms of its bailout programme was clearly dead, which prompted the Greek government to step up its fiscal reforms, Fekter said in an interview with Austrian paper Der Standard.
“One will give (Greece) a few more weeks time,” she was quoted as saying. “At issue is only a short-term delay.”
Asked in a separate interview with the Oesterreich newspaper if Athens would get a debt package extension, she said: “Yes. We are still awaiting the troika report and Greece still has to get some things on track but we will achieve a cost-neutral extension.”
She gave no further details. Her spokesman said only the discussion centred now on how to give Athens more time to hit its targets without requiring any fresh funds.
In Athens, a Greek finance ministry official said no specific proposals emerged from the weekend’s eurogroup meeting as to how a postponement of the country’s deficit reduction targets could be financed.
Asked by Der Standard about the situation in Spain, Fekter said stress tests of Spanish banks would determine how much money each Spanish bank would need to recapitalise.
“We hear the requirement is far below the 100 billion,” she said. Pressed on how far below that level, she said: “Roughly around 60 billion euros.”
The troika of European Commission, International Monetary Fund (IMF) and European Central Bank is compiling a report on how well Athens is fulfilling terms on its 130 billion euro rescue package.
Fekter had said at a meeting of EU finance ministers in Cyrpus last week that Greece might be given more time to reach its fiscal targets but not more money.
EU officials have told Reuters that Athens is way behind on its debt-cutting programme but, having made strenuous efforts to shore up Spain and Italy, it would make no sense to tip Greece into default now and plunge the currency bloc back into chaos.
IMF chief Christine Lagarde has also said it was worth considering giving Greece more time to make the cuts demanded of it by its bailout programme, something Athens has requested.
International lenders are likely to reach final decisions on the revised financing programme for Greece in the second half of October, Greek Finance Minister Yannis Stournaras has said.
Greece’s second bailout envisages Athens returning to international markets by 2015, but with two parliamentary elections in May and June after political parties struggled to form a coalition, the country has lost ground on its reform agenda. Deepening recession has also made its targets less attainable.
Although the extent of the shortfall will not be known until next month, Greece is unlikely to win back investor confidence quickly and meet its targets, which include a primary surplus of 4.5 percent of economic output in 2014.