Greece appeals to creditors to approve debt relief measures
- Author: Zachary Reyes May 28, 2017,
May 28, 2017, 14:56
Greece will receive billions of euros to repay the institutions it has borrowed money from in time for a crucial July deadline, avoiding another situation that could plunge the country into crisis - as when it almost defaulted on its loans in 2015. Moreover, the German government, one of the most prominent sponsors of the relief package for Greece, does not yet have an internally coordinated vision of the prospects of the Greek bailout.
According to DW, the issue is sensitive in Germany, where more debt relief for Greece is widely seen as a vote loser in the run-up to parliamentary elections in September.
Ministers did not agree on releasing new loans to Athens, but Jeroen Dijsselbloem said work was progressing towards a next disbursement "before the summer".
The Eurogroup, consisting of economy and finance ministers of the Eurozone, called the tone of the report very positive and emphasised that the fact that there are banks that need to expand their capital for the future does not imply they are not meeting present requirements.
The discussion therefore focuses on how to make a euro zone statement on Greek debt relief from a year ago, more detailed and more concrete.
Convincing the IMF to join the program is a condition for the disbursement of more aid by the euro area, as most governments in the bloc, including Germany, see the Fund's participation as a guarantee for the credibility of the bailout.
It appeared the way was clear earlier in May when the Greek government agreed to extra pension cuts and tax increases demanded by creditors.
Germany has led a coalition of euro zone countries pushing for International Monetary Fund involvement to balance what some argue is an overly lenient approach from the European Commission.
The Eurogroup also said it could consider replacing more costly International Monetary Fund loans to Greece with cheaper euro zone credit and transfer the profits made from a portfolio of Greek bonds bought by euro zone national central banks back to Athens.
This would include dramatically extending grace periods and maturities on the loans far beyond what the eurozone has committed to so far.
Greece's debt stands at almost 180 percent of annual output, the legacy of a crisis that brought panic to the markets and almost forced the country out of the eurozone.
The next meeting of the so-called Eurogroup is scheduled for June 15 in Luxembourg. "I'm quite confident that if all sides are in a mood to compromise, it should not be beyond the wit of man to find that compromise within three weeks", he said. Germany and France are Greece's biggest lenders.
The source said most of the eurozone ministers and officials spent Monday night making smalltalk or resting to kill time.
While Le Maire said it's "important there be a solution that reassures the Greek people and of course reassures Greece's creditors", Schaeuble insisted that "structural reforms are the decisive thing" to improve Greek growth.