Monday

27th Mar 2017

Report: Troika considering second debt restructuring for Greece

  • (Photo: Wayne Lam (Ramius))

The troika of international lenders is considering a second debt restructuring for Greece, according to Financial Times Deutschland.

"There is such a discussion," a senior official told the paper.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The discussion reportedly revolves around writing off Greece's first bailout of €110bn dating back to 2010, when eurozone states, the European Central Bank and the International Monetary Fund cobbled together a bailout via bilateral loans.

But neither the IMF or the ECB is willing to take any losses, putting the whole burden on eurozone governments, sources told the newspaper.

The IMF always insists on getting its money back in countries they lend to around the world and the ECB considers a debt write-off as direct government funding, which is forbidden under its rules.

If agreed, the debt restructuring would be the second so-called haircut, after banks and investment funds earlier this year agreed to slash €100bn off the country's debt by agreeing to lose 70 percent of the returns on the old Greek bonds they held.

The deal was a first-ever 'private sector involvement' for a eurozone country and a precondition for a further €130bn bailout to be paid mostly by eurozone states and the ECB, with a small contribution from the IMF as well.

A second haircut is also floated as a likely scenario by the head of Commerzbank, one of Germany's biggest private lenders.

"We will eventually see another debt haircut on Greece, in which all creditors will have to participate," Martin Blessing said at a conference in Frankfurt on Thursday (20 September).

Meanwhile, in Athens, the government is struggling to implement €11.5bn worth of spending cuts which are needed for the next tranche of the bailout to be disbursed. One measure they reportedly agreed on early Friday morning is to raise the retirement age to 67 years, Reuters reported.

Experts from the troika (ECB, IMF and EU commission) are currently in Athens trying to fill the funding gap that emerged from a worse-than-expected recession and months of political quarrels, including two consecutive general elections.

A senior EU official told this paper last week that the troika will in the end "fudge" the report so that no third bailout is required.

Greece should get more time, France says

France is in favour of giving Greece more time to meet its bailout conditions. Meanwhile, German media says there are plans to increase the EU bailout fund to €2 trillion.

SMEs lack support in EU financial plan

The European Commission's plan for a capital markets union is said to be aimed at small and medium-sized enterprises, but many could end up being left out in the cold.

Eurozone chief in 'drinks and women' row

[Updated] The Netherlands' Jeroen Dijsselbloem faces calls for resignation after saying that crisis-hit countries in southern Europe spent "money on drinks and women" before being helped by others.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

Stakeholders' Highlights

  1. European Gaming & Betting Association60 Years Rome Treaty – 60 Years Building an Internal Market
  2. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  3. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  4. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  5. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  6. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  7. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  8. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  9. Party of European SocialistsWe Must Renew Europe for All Europeans
  10. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  11. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People
  12. Nordic Council of Ministers25 Nordic Bioeconomy Cases for Sustainable Change