Tuesday

13th Apr 2021

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.

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

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. Putin refuses to talk about military build-up, Ukraine says
  2. EU bank to help Greece manage corona-recovery funds
  3. Johnson & Johnson vaccine deliveries to EU begin
  4. EU sanctions commander of Iran's Revolutionary Guard
  5. UK opens investigation into ex-PM Cameron lobbying
  6. 'Significant differences' in EU-UK talks on Northern Ireland
  7. Bulgarian PM reveals price rise in new EU-BioNTech deal
  8. Biden sending envoy to Brussels

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 MinistersDigitalisation can help us pick up the green pace
  2. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  3. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  4. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  5. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  6. Nordic Council of MinistersWomen benefit in the digitalised labour market

Latest News

  1. How the pandemic became an EU goldmine for crime
  2. China responds to 'low-efficacy' vaccine fears
  3. Merkel party chiefs support Laschet's chancellor bid
  4. EU refuses to bail out Montenegro's China loan
  5. Industry lobby to 'co-decide' on nearly €10bn EU public money
  6. Why Ursula von der Leyen won't go
  7. Incorporating gender in trade policy to benefit all
  8. Does Italian regionalism actually work?

Join EUobserver

Support quality EU news

Join us