Tuesday

19th Jun 2018

Report: Troika suggests further debt write-down for Greece

Greece's lenders are suggesting a further write-down on the country's debt, according to Der Spiegel, with tax-payers to feel the hit for the first time.

The German news magazine Sunday (28 October) reported that experts from the European Commission, the European Central Bank and the International Monetary Fund - known as the troika - are pressing for Greece to receive more debt relief as it faces a deepening financial crisis.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

  • Greece has managed 60 percent of the reforms demanded of it (Photo: 2dubstEEr)

As part of Greece's second bailout agreed earlier this year, private investors, such as banks, agreed to write off more than 50 percent of the face value of their Greek bonds. This time round public sector bondholders, such as member states holding Greek debt, are being asked to chip in.

The European Central Bank - also a public sector bondholder with around €40bn in Greek debt - would not be involved as accepting a loss on its bonds would constitute a form of state financing that is illegal for the eurozone bank. The IMF would also not be part of a debt relief deal.

Greece should also get an extra two years to bring its budget into order with the delayed deadline to cost a further €30bn according to European Commission estimates and up to €38bn according to the IMF.

In return for any debt relief, Greece would have to carry out a further 150 reforms, reports the weekly, including making hiring and firing rules more flexible and changing the minimum wage.

Greece needs a positive assessment from the troika in order to receive the next tranche (€31.5bn) of bailout money. The troika report is due 12 November at the latest while Athens has said it will run out of money to pay its bills on 16 November.

But Athens' lenders have been getting increasingly frustrated with the country as it struggles to impose further cost-cutting measures on the back of four years of recession.

Der Spiegel notes that Greece has managed 60 percent of the reforms demanded of it, while 20 percent of the measures are being debated by the government and 20 percent are unmet.

Eurozone finance ministers are due to discuss Greece at a teleconference on Wednesday (31 October) before meeting face-to-face on 12 November when key financial decisions are meant to be taken.

Germany, lending the most to Greece and facing a general election next year, has already rejected the debt hair-cut idea.

"That is a discussion which has little to do with the reality in the member states of the eurozone," Finance Minister Wolfgang Schaeuble told public radio Deutschlandfunk.

Eurozone gives Greece 10-day ultimatum

Eurozone ministers have given Greece 10 days to implement budget cuts in return for a bailout cash, as Germany Merkel braves protesters on a visit to Athens.

Greece in limbo after bail-out talks fail

Eurozone finance ministers will reconvene next week after failing to reach a deal on whether to release the next tranche of Greece's multi-billion euro loan programme.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

Opinion

Europe could lose out in North Korean bonanza

South Korean businesses including Hyundai and Samsung are already scoping investment opportunities. Will North Korea become a 'new Vietnam' opportunity - or more like Myanmar, where slow Brussels policy-making meant EU exporters lost out.

News in Brief

  1. EU court orders Le Pen to repay EU parliament
  2. Commission needs time to assess German Dieselgate fine
  3. Merkel and Macron meet over migration and eurozone
  4. Salvini plans census of Roma communities
  5. Slovenia to take Croatia to court in border row
  6. Parliamentary setback over corruption in Romania
  7. Lords force new vote for UK parliament to influence Brexit
  8. Report: Audi CEO arrested over Dieselgate

Stakeholders' Highlights

  1. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  2. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  8. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  9. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  10. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  11. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  12. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs

Join EUobserver

Support quality EU news

Join us