Monday

29th May 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.

Stakeholders' Highlights

  1. Centre Maurits CoppietersWhat's Going on in Catalonia? Join the Debate on 8 June
  2. Swedish EnterprisesDo We Need a More Social Europe? A Lively Debate Awaits You on 7 June
  3. Centre Maurits CoppietersDiscover the Role of Feminism in the Peripheries of Europe on 9 June
  4. Malta EU 2017EU Group Launched to Focus on Priorities and Policies Concerning Children
  5. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  6. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  7. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  8. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  9. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  10. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  11. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  12. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade

Latest News

  1. Macron and Putin hold uneasy first talks
  2. From Greece to Scotland, we stand by Europe
  3. Juncker keen to build EU 'bridge' to Trump
  4. Ministers water down post-Dieselgate reform
  5. Club de combat: des espions russes recherchent des recrues européennes
  6. Judges refuse to 'let go' of Le Pen's fake jobs case
  7. Merkel: Europe cannot rely on its allies anymore
  8. Macron to tell Putin EU sanctions to stay