Greece’s hopes for debt relief won’t include a cut in what it owes in 240 billion euros in three bailouts, its bigger lender, Germany has declared, world press reports said.
Solution on Greece Will Be Found Without Debt Relief
German Finance Minister Wolfgang Schaeuble said on German television that he was “quite optimistic” lenders would find a solution on Greece in the next few weeks but he added that this would not include debt relief for the troubled country.
“We will find a solution in the coming weeks but it will not have anything to do with debt relief but rather with Greece having to do more on the way to becoming a competitive economy,” he said in an interview on German public broadcaster ARD.
Schaeuble said given that the maturities on Greek debt were already up to 35 years and interest repayments had been deferred for 10 years, people who were talking about debt relief simply “don’t want to talk about what Greece needs to do” and Athens needed to meet the conditions that had been set.
“We’re helping Greece – we’re buying it time,” he said, adding that the lenders always fulfilled their agreements but it was difficult to get Athens to do the same.
The European Union and the International Monetary Fund (IMF) held talks on Friday to agree on how to coax Greece into more economic reforms linked to its bailout and unlock more funds, with one EU official saying they hoped for a deal by Sunday.
Germany Tells Greece it Needs to “Do More” as Debt Talks Stutter
Greece said it’s aiming for an agreement with creditors on the next tranche of emergency loans by the beginning of May as German Finance Minister Wolfgang Schaeuble sought to play down debt relief expectations.
“We have almost identical estimates with the European Commission,” Minister of State Nikos Pappas said in an interview with Bloomberg News.
“And what needs to be done in the following days is to turn the almost identical into identical,” he said, ahead of frantic negotiations between the government and officials representing creditor institutions that failed to find a deal.
Bailout auditors from the European Union’s executive arm, the euro area’s crisis fund, the European Central Bank and the International Monetary Fund have been holding talks with government officials in Athens for the past week to discuss policy measures attached to the country’s bailout.
The biggest area of contention is the management of bad loans burdening bank balance sheets, Pappas said, with their positions closer on a pension system overhaul and income tax reform.
“We’ll find a solution in the coming weeks,” Schaeuble said Sunday in an interview with German public television channel ARD. This solution “has nothing to do with debt forgiveness, but with the fact that Greece needs to do more” to return to a competitive economy, he said …
The first review of the country’s latest bailout was originally scheduled to conclude at the end of last year. Pappas attributed the delay to the IMF disputing the effectiveness of Prime Minister Alexis Tsipras’ proposals for additional budget savings and its more pessimistic view of the Greek economy.
The IMF also doesn’t offer any additional leverage on Greece’s calls for debt relief even though this is a commitment included in the country’s agreement with the euro area, Pappas said.
Athens, Creditors Locked in Tough Talks Over Bailout
Deutsche Presse Agentur
Greek Finance Minster Euklid Tsakalotos was visibly exhausted Monday morning after he emerged from overnight talks with the country‘s creditors in Athens, private broadcaster Skai reported, as Greece negotiates the terms of its bailout.
Officials from the European Central Bank, the International Monetary Fund (IMF), the European Stability Mechanism and the European Commission began a new round of talks with Athens on April 4 to review Greece‘s progress on bailout commitments made last summer.
After pausing the talks on Friday to consult in Brussels, the quartet returned to Athens the same day and restarted negotiations on Saturday.
The situation grew so complicated on Sunday that the governor of Greece‘s central bank, Ioannis Stournaras, was called in overnight and took part in the talks for two hours, state TV reported …
The creditors and Greek officials have so far failed to agree on the measures Athens must implement in order to save 5.4 billion euros (6.2 billion dollars) and thereby gain access to another round of credit as part of its third bailout package of up to 86 billion euros.
The proposed measures encompass tax hikes, laws on bad loans and additional pension reforms.
On Sunday night, German Finance Minister Wolfgang Schaeuble called on Greece to fulfill the requirements for further aid.
“We will find a solution in the coming weeks, but it will have nothing to do with cancelling debt,” Schaeuble told Germany‘s public broadcaster ARD, adding that Athens needed to do more to improve its economic competitiveness.
Interest rates have already been deferred for ten years, the minister said, and the loans would have a duration of up to 35 years.
“We are helping Greece,” Schaeuble said. “We are buying them time. We will also find a solution this time.”