Friday

21st Jul 2017

Eurozone fund chief dashes Greek hopes for debt deal

Greece's hopes for another debt deal aimed at helping it exit the bailout programme at the end of 2014 are not realistic, Klaus Regling, the head of eurozone's bailout fund (ESM), told Spiegel magazine.

"There will be no debt restructuring," Regling said.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  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.

  • ESM chief Klaus Regling is sceptical about Greece exiting the bailout programme

The ESM is Greece's largest creditor, with €133 billion in 30-year loans already disbursed at an interest rate of 1.5 percent.

"The interest on these loans was deferred for the next ten years. All this equals a debt restructuring, from an economic point of view," Regling said.

There is also very little room for change with other creditors. The International Monetary Fund - contributing €27.2 billion to Greece's bailout - is not allowed to lower its interest rate.

"There may be some little room for manoeuvre in the bilateral loans from the first bailout package. But that is up to eurozone member states to decide, they are the creditors there," Regling said.

Greek foreign minister Evangelos Venizelos, who also served as finance minister when the bailout terms were negotiated, has warned that his coalition government may be toppled and replaced by anti-bailout parties if Greece does not get a debt deal this year.

"It is not about another debt restructuring. It's about making the debt burden sustainable (...) for instance by prolonging the repayment deadlines and reducing the interest rates," Venizelos told Frankfurter Allgemeine Sonntagszeitung on Sunday.

He warned that if Greece would be forced out of the eurozone, this would become a "threat to the German taxpayer" and therefore it was "in the common European interest for Greece to successfully exit the bailout programme."

Greek Prime Minister Antonis Samaras in his New Years' speech promised that his country would exit the bailout in 2014.

In December, he sought a debt deal with fellow EU leaders, but his efforts proved unsuccessful.

Meanwhile, the troika of lenders - IMF, European Commission and European Central Bank - has delayed a report allowing for the next bailout tranche to be paid out because of disagreements over the 2014 budget.

Greece was the first eurozone country to seek a bailout in 2010 - first via bilateral loans, then in two successive EU-IMF programmes - totalling €240 billion in 2012. Its debt burden stood at 190 percent of GDP in 2013, while its economy was still in deep recession and over a quarter of its workforce was jobless.

Greece to get €7.7bn loan next week

The ESM, the eurozone emergency fund, agreed on Friday to unblock a new tranche of aid as part of the bailout programme agreed upon in 2015.

EU and Japan agree on free trade

Japanese prime minister and EU leaders to endorse major trade deal on Thursday in anti-protectionist message to Trump.

Opinion

Greece needs a new plan

Two years into its third bailout, Greece needs to combine the necessary fiscal targets with a new vision. This can be done in the context of the ongoing industrial revolution.

Opinion

Ceta and pesticides: A citizens' rights issue

The trade agreement with Canada will begin to apply on 21 September. But there is still a potential conflict on the right to data protection vs. the right to access information.

News in Brief

  1. Polish parliament adopts controversial justice reform
  2. GMO opt-out plan unlikely to go anywhere in 2017
  3. Slovak PM threatens to boycott inferior food
  4. France takes Google's 'right to be forgotten' to EU court
  5. Turkey accuses German companies of supporting terror
  6. Israel's Netanyahu caught calling EU 'crazy'
  7. UK does not collect enough data to expel EU nationals
  8. Polish president threatens to veto justice reform

Stakeholders' Highlights

  1. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  2. ACCAAnnounces Belt & Road Research at Shanghai Conference
  3. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  4. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  5. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  6. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  7. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  8. Counter BalanceOut for Summer Episode 1: How the EIB Sweeps a Development Fiasco Under the Rug
  9. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  10. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  11. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  12. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School

Latest News

  1. Dutch coalition talks lengthiest in 40 years
  2. Polish parliament steps up showdown with EU
  3. EU urges UK to clarify its Brexit positions
  4. Law expert: direct EU powers have become too complicated
  5. Winter is here for Spitzenkandidat, but he'll survive
  6. Mafia money pollutes the EU economy
  7. Central Europe should be wary of Brexit stopping
  8. Poland's 'July coup' and what it means for the judiciary