European governments will find a way oftiding Greece past next week's bill redemption as the pieces of anupdated aid package take longer than planned to fall into place, aEuropean official said.

While finance ministers on Nov. 12 areunlikely to sign off on 31.5 billion euros ($40 billion) of freshloans, the result won't be an “accidental default” for Greece when5 billion euros of bills mature on Nov. 16, the official toldreporters in Brussels today on condition of anonymity.

Creditor countries will weigh whetherGreek legislation passed this week goes far enough in overhaulingthe economy and showing that Greece, the origin of thethree-year-old debt crisis, deserves to continue tappinginternational aid, the official said.

“We're not out of the woods yet,”German Finance Minister Wolfgang Schaeuble said yesterday inHamburg. “I don't see how we can take the decision already nextweek.”

Delays reflect tensions within theGreek coalition and between Greece and the “troika” representingcreditors. Donor countries such as Germany also need nationalparliamentary endorsement before giving the green light to the nextpayments from a total of 240 billion euros pledged to Greece since2010.

Greece overcame one hurdle yesterdaywhen Prime Minister Antonis Samaras eked out a slim parliamentarymajority for a bill on pension, wage and benefit cuts. The nexthurdle comes on Nov. 11, when the parliament votes on the 2013budget.

Two-YearExtension

Samaras has pressed for two extrayears, until 2016, for Greece to meet deficit-reduction targetsimposed by European governments and the International MonetaryFund. Creditors' calculations are assuming a two-year extension,the Brussels official said, while declining to say whether it willbe approved.

A variety of options are underconsideration for plugging the financing hole that an extensionwould open up, the official said. While engineering a buyback ofGreek debt at depressed prices is one of them, it is “technicallyand financially infinitely more complicated than you would everimagine,” the official said.

Solutions hinge on when Greece's debtwill become “sustainable,” previously defined as dropping to 120percent of gross domestic product by 2020. The official today saida decade is now the rough timetable, implying that thesustainability target may be pushed out to 2022 or 2023.

The official declined to say whetherthe European Central Bank would allow greater Greek treasury billissuance as a way of financing next week's expiration.

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