Greece confident of debt relief deal
ATHENS (AFP) — Greece’s Finance Minister Euclid Tsakalotos on Monday said he was “confident” that an upcoming eurozone meeting would reach a “good solution” on debt relief, whilst calling on creditors to end their “procrastination.”
“We’re looking for a good solution. We’re not looking for a perfect solution. I’m confident we’ll get a good solution,” Tsakalotos told reporters in reference to the June 15 meeting.
“The pressure is on all sides...don’t procrastinate at the cost of the Greek economy,” Tsakalotos said.
“We are getting close to the time when a decision needs to be taken,” he added.
Greece’s debt mountain stands at a towering 179 percent of annual output, the legacy of a crisis that brought panic to the markets and nearly forced the country out of the euro.
A deal granting Greece debt relief and labeling its debt sustainable — seen by Athens as essential to boost recovery — has been held up by disagreements between the International Monetary Fund and European creditors led by Germany on Greek fiscal targets.
Germany has an election in September and the German public is hostile to more financial support for Athens.
At a prior meeting on May 22, hopes were dashed after Eurogroup president Jeroen Dijsselbloem floated the possibility of the IMF approving a loan for Greece, but withholding disbursement of the funds until it had sufficient details on the debt relief — something virtually unheard of in IMF aid programs.
“The (creditors) differ on what is necessary. Why should that be a problem for the Greek side? We’ve done our side,” Tsakalotos said, referring to a recent package of cuts adopted by parliament.
The disagreement has held up the next tranche of aid from Europe from the third, 86-billion-euro ($96 billion) aid deal Greece and its creditors secured in July 2015.
Greece needs the funds to repay seven billion euros in maturing debt in July.
An agreement would also send a positive sign to investors, Tsakalotos reasoned.
“Everybody understands that to grow out of the crisis, eventually the investors must have confidence in the sustainability of Greek debt,” he said.
The impasse has raised echoes of a clash between Greece and its creditors that nearly saw it pushed out of the euro before the July 2015 deal.
But Tsakalotos insisted Monday: “I don’t see an appetite for not reaching a solution...I don’t think anybody wants a default.”
Athens also hopes to be finally allowed access to the European Central Bank’s asset purchase program, known as quantitative easing, or QE, to help its return to bond markets.
Tsakalotos on Monday declined to speculate whether the European Central Bank would approve the stimulus for Greece without the IMF on board.
“Like our Lord, the ECB works in mysterious ways,” he said.