Saturday

29th Apr 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.

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.

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.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Investigation

MEPs oppose EU agency to prevent Dieselgate II

The European Parliament said on Tuesday that there should be more EU oversight on how cars are approved, but stopped short of calling for an independent EU agency.

News in Brief

  1. Vote of no confidence prepared against Spanish PM
  2. Syria to buy Russian anti-missile system
  3. Germany seeks partial burka ban
  4. Libya has no plan to stop migration flows
  5. EU has no evidence of NGO-smuggler collusion in Libya
  6. Poland gets 'final warning' on logging in ancient forest
  7. Commission gives Italy final warning on air pollution
  8. Romania and Slovenia taken to court over environment policies

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceCharlotte Hornets' Nicolas Batum Tells Kids to "Eat Well, Drink Well, Move!"
  2. ECR GroupSyed Kamall: We Need a New, More Honest Relationship With Turkey
  3. Counter BalanceParliament Sends Strong Signal to the EIB: Time to Act on Climate Change
  4. ACCARisks and Opportunities of Blockchain and Shared Ledgers Technologies in Financial Services
  5. UNICEFRace Against Time to Save Millions of Lives in Yemen
  6. Nordic Council of MinistersDeveloping Independent Russian-Language Media in the Baltic Countries
  7. Swedish EnterprisesReform of the European Electricity Market: Lessons from the Nordics, Brussels 2 May
  8. Malta EU 2017Green Light Given for New EU Regulation to Bolster External Border Checks
  9. Counter BalanceCall for EU Commission to Withdraw Support of Trans-Adriatic Pipeline
  10. ACCAEconomic Confidence at Highest Since 2015
  11. European Federation of Allergy and Airways60%-90% of Your Life Is Spent Indoors. How Does Poor Indoor Air Quality Affect You?
  12. European Gaming and Betting AssociationCJEU Confirms Obligation for a Transparent Licensing Process

Latest News

  1. EP chief faces questions after homophobic 'summit'
  2. EU signals Northern Ireland could join if united with Ireland
  3. One year later: EU right to open internet still virtual
  4. Rethinking Europe's relationship with Turkey
  5. Mob storms Macedonian parliament
  6. MEPs retain secrecy on office spending
  7. May accuses EU-27 of 'lining up against Britain'
  8. Resurrected Renzi to regain leadership of Italy's ruling party