EU banks mull gradual Greek debt relief
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.