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10th Dec 2022

Greece wants another loan extension to prevent restructuring

Greece has said it would prefer yet another extension to its EU-IMF loan repayment schedule over debt restructuring.

The country's finance minister, George Papaconstantinou, said in an interview with French left-wing daily Liberation on Monday (2 May): "It would be better for us to extend once again the timing of repayment of the €110 billion that we're borrowing from our partners and that we further reduce the interest rate."

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  • Earlier Greek protest: The government is privatising €50 billion in assets (Photo: George Laoutaris)

Following the release of the article, he was pressed by reporters in Athens on the same subject and said that he hoped to "have a better settlement of terms."

Earlier this year, Athens won an extension to its bail-out payment period and a reduction in the interest rate it pays on the sum.

"There will be no restructuring or haircut," the minister continued.

Also on Monday, EU economics commissioner Olli Rehn repeated that restructuring of Greek debt is not on the cards.

"Proponents of debt restructuring seem to ignore the potentially devastating consequences for the country itself and the euro area as a whole," he told a conference in Brussels. "I repeat it is not part of our strategy."

Separately, Greek prime minister George Papandreou on Monday rallied a clutch of ministers arguing that the government needs to appear united as officials from the European Commission, the European Central Bank and the International Monetary Fund visit the country for their latest inspections of progress in delivering the demanded austerity and structural adjustment.

The leader brought together five key ministers, the right-wing daily Kathimerini reports, along with the government's spokesman. The EU-IMF-ECB troika officials must be convinced of the administration's commitment to follow through on its programme of cuts.

In recent weeks, a number of MPs and ministers have publicly criticised the government's austerity measures, the latest of which deliver €26 billion via public sector reforms and another €50 billion in a fire-sale of state assets.

Troika officials are in the capital this week for an assessment of the two additional programmes, while senior troika representatives descend upon the city next week to decide if they are to give the green light to the latest tranche of EU-IMF cash, amounting to €12 billion this time.

North-south divide

The Greek finance minister in the Liberation interview also was reported as lashing out at "northern" countries over growing reluctance to back bail-outs for peripheral eurozone states.

"In several countries of Northern Europe, the debate on financial aid to countries in trouble has turned emotional, which doesn't help us get to a solution," he said.

Making the point on Monday in Finland, the head of the populist anti-immigrant True Finns party, which soared to third place in the recent elections on the back of an anti-bail-out campaign, said his party will not soften its position and continued to rule out support for a Portuguese bail-out.

"There have been attempts to control the crisis with these measures for more than a year, with no success: now we're on the brink of collapse. Every step forward on this strategy increases risks for losses by Finnish and other taxpayers," he told reporters in Helsinki.

He conceded that this may exclude the party from taking part in a coalition government.

"Let's hope Finland gets a majority government, but we don't expect to get an invitation to form part of the next government," he said.

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