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Economy

ESM’s Regling: Greece’s Debt is Manageable

ATHENS – Greece's debt is manageable, despite an increase in measures to tackle the coronavirus pandemic, as its service costs are lower than in many other countries, said Klaus Regling, head of the European Stability Mechanism (ESM), on Tuesday in a joint interview with the German, French, Italian, Spanish and Dutch news agencies.

Regling stressed that Greece has been very successful in dealing with the pandemic. He said that it has now been recognised that Greece was among those countries that have faced the pandemic well. There is a relatively low number of infected people, he noted, and a very small number of people who have died. "So there has been a lot of success, in that sense, and we can only congratulate Greece on that success," Regling added.

Asked if a new crisis is possible in Greece due to the pandemic and an "explosion" of debt, the ESM chief replied that he doesn't think that there will be a debt explosion.

It is increasing, of course, as Greece will have a larger budget deficit, as will all countries, he said and added: "The problem, on the one hand, is that the extra debt is added to one of the highest rates in Europe. This is true. But when you compare the debt rates, you have to understand that in the case of Greece more than half of its debt is towards the ESM, that is, it has very, very low interest rates. Therefore, in this sense, the annual service costs for Greece in relation to GDP are lower than in many other countries. This is why its debt is manageable, although Greece has a high level. Greece's debt will increase, as in all other countries, but the country will not differ in this sense from other member states."

 

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