Tuesday

24th Oct 2017

EU and IMF clash over Greek debt plan

  • Lagarde and Juncker: Eurozone ministers want to extend Greece's debt deal to 2022 (Photo: consilium.europa.eu)

Eurozone finance ministers and the International Monetary Fund (IMF) clashed publicly on Monday (12 November) evening over how long Greece should get to bring its debt under control.

Jean Claude-Juncker, who chairs the meetings of euro finance ministers, said euro countries want to give Greece two more years – until 2022 – to cut its debt mountain to 120 percent of GDP.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

When Juncker insisted on the new timeline, IMF chief Christine Lagarde, sitting alongside him in a press conference, appeared to roll her eyes.

"In our view, the appropriate timetable is 120 per cent by 2020 ... We clearly have different views," she said.

There will be another meeting on 20 November to see if the two sides can resolve their differences.

But the highly unusual public airing of the disagreement does not bode well for the international lenders finding an agreement on a new debt plan for Greece next Tuesday.

Both sides have to agree in order for the next bailout tranche (€31.5bn) to be released to Athens.

The spat between the EU and the IMF has been simmering for some time.

Lagarde believes the 2020 deadline should be stuck to and that eurozone countries should accept losses on their loans. The EU side believes Greece can return to growth and service its debt if it is given a bit longer to do so.

Member states taking a loss on their loans is seen as big political no-no, particular in Germany.

Juncker said that his "personal feeling" is that public sector writedowns – where member states take a loss – will not be the route that is taken.

The further delay comes despite the fact the Greek parliament last week backed a tough austerity budget that increases the retirement age to 67 and imposes further pension and salary cuts, as well as a 35 percent reduction on redundancy pay.

Greece also faces a bill for €5 billion of treasury notes on Friday (16 November) and will now ask for the bills to be rolled-over.

"I won't tell you how [we will solve this problem], but there won't be any problem on November 16," Juncker said.

Meanwhile, economic affairs commissioner Olli Rehn praised the resolve of the Greek government for forcing through unpopular economic reforms, commenting that "words have been backed by deeds."

He added that it is "to debunk the perception that no progress has been made, this is damaging, unfair and simply wrong."

Greece passes austerity bill despite clashes

Greece has narrowly adopted an austerity package needed to unlock the next bailout tranche, despite a general strike and violent clashes with riot police.

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. Tusk: It's up to London to have a good Brexit deal
  2. Bettel wants more ministerial meetings on digital
  3. Austria's Kurz to open coalition talks with far-right
  4. Estonia: Finalising digital market before 2019 'do-able'
  5. Don't let City of London 'drift away', Luxembourg warns
  6. Far-right enters German parliament officially
  7. Orban declares migrant-free zone in Eastern Europe
  8. Madrid set to use force to stop Catalonia independence

Stakeholders' Highlights

  1. A Soul for EuropeWho Assumes Responsibility for Europe?' Conference on 10-11 November in Berlin.
  2. Martens CentreI Say Europe, You Say...? Interview With EU Commission VP Jyrki Katainen
  3. Mission of China to the EUPresident Xi Jinping Proposes Stronger Global Security Governance at Interpol Assembly
  4. European Friends of ArmeniaEU Engagement Could Contribute to Lasting Peace in Nagorno-Karabakh
  5. UNICEFViolence in Myanmar Driving 12,000 Rohingya Refugee Children Into Bangladesh Every Week
  6. European Jewish CongressBulgaria Applauded for Adopting the Working Definition of Antisemitism
  7. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  8. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  9. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  10. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  11. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  12. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!