Tuesday

15th Jun 2021

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

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe 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.

News in Brief

  1. Swiss voters reject climate change measures
  2. Spain: Thousands protest against Catalan leaders' pardon
  3. Belarus opposition leader says 'harsh' sanctions needed
  4. Far-right ex-settler becomes Israeli prime minister
  5. EU top court fast-tracks rule-of-law case to October
  6. Hungary's Fidesz wants to ban LGBTIQ content for under-18s
  7. MEPs join EU citizens on farm-animal cage ban
  8. Council of Europe urges Russia to release Navalny 'immediately'

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. Yemen foreign minister to EU: to stop the war, talk to Iran
  2. Brexit grumbles overshadow UK summit
  3. Former French PM to work for Russian oil firm
  4. Lobbyists push to greenwash EU rules for renewable hydrogen
  5. UN report on pushbacks draws cautious EU response
  6. Biden in Brussels, recovery package underway This WEEK
  7. Nato's biggest enemy hides within
  8. The Dutch politician suing the Dutch state for ethnic-profiling

Join EUobserver

Support quality EU news

Join us