German FM calls for Greek debt relief

Piggybank painted in colours of Greek flag stands amongst various euro coins in this

Eurozone finance ministers, the International Monetary Fund and the Greek government have failed to agree on a release of further bailout funds for Athens and have reached no deal on further offers of debt relief for Greece, EU officials say.

The eurozone-IMF standoff is the final obstacle to unlocking a tranche of bailout funds that will let Greece repay 7.0 billion euros of loans due in July. To ensure the new bailout funds, the Greek parliament approved pension cuts and tax hikes last Thursday.

Germany has led several eurozone governments that have dragged their heels on tackling the debt mountain over the long term, insisting on more reforms before doing Athens further favours.

"At this point, we have not reached an overall agreement on that part of our discussion", Dijsselbloem said.

This would include dramatically extending grace periods and maturities on the loans far beyond what the eurozone has committed to so far.

"We have made huge progress on the policy package on which so much work had been done in the last months and on which an agreement had been reached between Greece and the institutions", Dijsselbloem said.

The IMF and Germany disagreed over Greece's economic outlook and the amount of debt relief required to assure economic stability, according to two European Union officials with knowledge of the talks, who asked not to be identified because the discussion was private.

Debt relief would be rolled out after Greece's programme ends in 2018, if the country has implemented agreed reforms and if the euro area and International Monetary Fund believe it is needed.

France's Finance Minister Bruno Le Maire, center, talks with Italy's Finance Minister Pier Carlo Padoan, right, and Greece's Finance Minister Euclid Tsakalotos prior to a meeting of Eurogroup finance ministers at the.

The IMF is reluctant to participate in a bailout unless the euro area ensures the country's 315 billion-euro ($355 billion) debt load is sustainable.

However, during these four decades, economic crises, structural gluts and financial panics are all possible, so counting in the likely cyclical recessions and other shocks, real GDP growth in Greece must be above 1.3 percent.

Newly elected French President Emmanuel Macron said he backed debt relief for Greece in a phone call on Monday with Greek Prime Minister Alexis Tsipras.

The Brussels-based meeting was aimed at deciding whether Greece had done enough to receive a €7.5bn (£6.4bn; $8.3bn) loan plus debt relief.

EU Economics Commissioner Pierre Moscovici also said he saw a deal at the next Eurogroup meeting, in Luxembourg on June 15.

"We still think there is a need for more realism in assumptions and more specificity", Poul Thomsen, head of IMF's European Department, told Reuters.

However, the fiscal path to be followed by the country after the end of the bailout in 2018 and the debt issue remain to be closed.

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