Eurozone Delays Greek Debt Relief Talk Until The Fall

BRUSSELS – Greece will have to wait until after the summer for the Eurozone to take up the question of a debt relief request from 240 billion euros ($330.7 billion) owed international lenders for two bailouts, setting back hopes for a quick resolution.

Finance Minister Yannis Stournaras went to Brussels carrying the plea from Prime Minister Antonis Samaras, who was looking for a fast answer before this month’s critical elections for Greek municipalities and the European Parliament.

His New Democracy Conservatives are locked in a tight battle with the major opposition Coalition of the Radical Left (SYRIZA) which is opposed to the austerity measures that came with the rescue packages and have hammered away at him for imposing them.

Eurozone chief Jeroen Dijsselbloem lauded Greece on achieving a primary surplus, the trigger for allowing a request to restructure the loans or get some of the amount excused, which would force taxpayers in the other 17 countries using the euro to pick up the tab for generations of wild overspending by Greek governments for 40 years.

At a press conference after the meeting he said the “relative merits of possible debt sustainability” would be considered in Greece’s next bailout review, which is slated for the fall. He added that Greek authorities should not lose “momentum” in their reform efforts, a reminder for the government not to let up.

“Whether it’s necessary is still to be seen when we have the new debt sustainability figures. Whether debt relief measures or additional measures are necessary we will have to take into consideration in the context of the next review, which will be finalized after the summer,” he added.

Earlier in the day, German Finance Minister Wolfgang Schaeuble also praised Greece for its economic reform progress but noted that any decisions on debt would be taken “in the second half of the year.” Germany is the biggest contributor to the loans but has insisted on big pay cuts, tax hikes, slashed pensions and worker firings in return.

An official statement issued after the Eurogroup summit highlighted the “remarkable adjustment efforts undertaken by the Greek citizens and authorities,” which, it said, “allows the Greek economy to enter a new phase, moving from stabilization and recovery to sustainable growth.”

The European Commission, in a forecast published on May 5, also offered encouraging signs, predicting Greece returning to growth sooner than anticipated, with a projected growth rate of 0.6 percent this year and 2.9 percent in 2015.

The EU saw unemployment easing from above 27 percent last year to 26 percent this year and 24 percent in 2015, which means there would still be more than one million people out of work and small comfort to them that their country was on the way back.

Samaras is expected to seize on the positive indictators but ignore the negative data, such as the record unemployment and deep poverty, in his party’s campaign.

The premier is expected to meet on May 6 with his coalition partner and Deputy Premier/Foreign Minister, PASOK Socialist chief Evangelos Venizelos, whose party has fallen into irrelevance and who has aligned it with a new center-left political movement Elia (Olive Tree) in a desperate bid to keep from disappearing.