Wednesday

27th Jul 2016

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.

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.

  • 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.

EU to tweak rules on Chinese 'dumping'

The EU Commission has tried to fudge the issue of whether China is a “market economy” amid efforts to protect European industry from cheap exports.

Court ruling puts Renzi bank plan in doubt

EU court ruling on bank bailouts has raised the likelihood of a political embarrassment for Renzi, months before a referendum puts his future and, potentially, Italy’s euro future on the line.

Stakeholders' Highlights

  1. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event 2016
  2. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  3. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  4. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  5. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  6. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  7. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  8. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  9. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  10. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company
  11. Access NowEuropol Supports Encryption. We Can Relax Now… Right?
  12. GoogleLearn about Google's projects across Europe on Twitter @GoogleBrussels