EU banks mull grad­ual Greek debt re­lief

The Pak Banker - - FRONT PAGE -

ATHENS: Greece's EU lenders have been work­ing on a plan to of­fer the coun­try grad­ual debt re­lief on con­di­tion that it adopts ad­di­tional re­forms by 2022, me­dia re­ported on Sun­day.

They would ini­tially al­low lower in­ter­est rates and longer ma­tu­ri­ties on Greece's 316-bil­lion-euro ($352 bil­lion) debt, the pa­per said. At a later stage, there would be talks on link­ing debt pay­ments to eco­nomic growth pro­vided Athens im­ple­mented mea­sures to be agreed with cred­i­tors by 2022, it added.

The plan has been dis­cussed among of­fi­cials from the Euro­pean Com­mis­sion, the euro zone's res­cue fund, the Euro­pean Cen­tral Bank, and the larger euro zone na­tions, the pa­per said. The lenders have pub­licly spo­ken about grant­ing debt re­lief on con­di­tion re­forms are com­pleted. Asked about the re­port, Fin­nish Fi­nance Min­is­ter Alexan­der Stubb said: "At this mo­ment, we are not look­ing at debt re­lief but at com­plet­ing the third pro­gramme's first in­terim re­view." On Thurs­day, Jeroen Di­js­sel­bloem, chair­man of the euro zone fi­nance min­is­ters group, had said they were con­cerned with the qual­ity of the re­forms Greece had promised in re­turn for its bailout.

Ne­go­ti­a­tions be­tween the heads of the EU/IMF mis­sion re­view­ing the coun­try's progress on a pen­sions over­haul, fis­cal tar­gets and the han­dling of bad loans, took a break ear­lier this month. It was un­clear when the lenders will re­turn in Athens. With­out their pos­i­tive first as­sess­ment of the re­forms, Greece can­not start re­lief talks it is seek­ing to show aus­ter­ity-weary Greeks their sac­ri­fices are pay­ing off.

Speak­ing af­ter an EU sum­mit that on Fri­day agreed a deal to help keep Bri­tain in the bloc and tackle the re­gion's mi­gra­tion cri­sis, Greece's Prime Min­is­ter Alexis Tsipras said all EU part­ners agreed the re­view needed to con­clude as soon as pos­si­ble.

Greece's fi­nance min­is­ter sug­gested on Satur­day that dif­fer­ences be­tween EU part­ners and the IMF over the bailout pro­gramme was un­der­min­ing govern­ment ef­forts to help the Greek econ­omy re­cover af­ter years of re­ces­sion. The IMF has said that it stands ready to sup­port Greece only if the coun­try's EU part­ners granted it "sig­nif­i­cant" debt re­lief. But Europe has made clear that it wants con­clu­sion of the re­view be­fore launch­ing debt re­lief talks.

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