By N. Bellos
[email protected]
Greece’s European creditors are reportedly considering “3+1” interventions for Greek debt relief, as part of a looming staff-level agreement expected, by all accounts, to be finalized this month at a May 22 Eurogroup meeting.
Whatever “interventions” will be based on a “road map” agreed to last May, in the wake of the first review of the Greek bailout program. The looming agreement this month aims to conclude the utterly delayed second review of the same program (third bailout).
Based on the 2016 “road map”, decisions for debt relief will be implemented with the completion of the current bailout, August 2018, but only if such measures are deemed as “necessary”.
The wording closely mirrors Berlin’s position, especially that of German FinMin Wolfgang Schaeuble, who on several occasions has emphasized that Greece doesn’t need debt relief now, but rather structural reforms.
According to other reports, ongoing behind-the-scenes talks between Europeans and the IMF over the Greek program are also in the “final stretch”. The Fund has over the past year and a half, if not longer, publicly demanded specific measures to ensure that Greece’s debt is sustainable. A comprehensive agreement, which would include debt relief over the medium-term, would allow the Fund to return to the Greek program as a lender.
Specific measures being discuss include an extension of maturities; a harmonization of interest rates for certain European Financial Stability Facility (EFSF) loans; an earlier payment date for certain sovereign loans via a reduction in the interest rate burden; a return of profits generated for Euro-system lenders (ECB, national central banks of Euro zone members) from the sale of Greek bonds on the secondary market, which total 4.5 billion euros from transactions in 2014; as well as using 21 billion euros left over from the third recapitalization of Greek banks to buy out IMF loans before their maturity, and thus reduce the overall borrowing costs.
