Tuesday

22nd Aug 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.

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.

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.

'Killer robots' are not about Terminator

A European signatory of an open letter about autonomous weapons says the imagery of fictional killer robots is distracting from a seriously dangerous issue.

News in Brief

  1. US will ask Nato allies to send more troops into Afghanistan
  2. Greece to be absent at event on Communism and Nazism
  3. Czechs want observer status in Eurogroup meetings
  4. Putin sends EU-blacklisted ambassador to US
  5. Austria has begun checks at Italian border
  6. Slovenian PM: Brexit talks will take longer than expected
  7. Merkel backs diesel while report warns of economic harm
  8. UK to publish new Brexit papers this week

Stakeholders' Highlights

  1. European Jewish CongressEuropean Governments Must Take Stronger Action Against Terrorism
  2. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  3. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  4. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  5. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  6. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  7. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  8. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  9. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  10. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  11. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  12. ACCAAnnounces Belt & Road Research at Shanghai Conference