Roughly 240 billion euros, out of a total public debt of 321 billion euros, are at the center of various scenarios circulating this month in Athens, major European capitals and in the IMF’s corridors over the contentious issue of Greek debt relief.
The upcoming period until a Eurogroup meeting on May 24 is deemed as crucial, assuming that Eurozone finance ministers actually proceed with some type of decision on Greek debt relief. The goal, at present, is for a recommendation by European institutions to approach the IMF’s position as much as possible, in order to achieve a deal next Tuesday. The Fund wants a substantive Greek debt relief in order to continue funding Athens as part of the so-called “Quartet” of institutional lenders.
According to reports, possible compromises in order to reduce the burden on debt-laden Greece include handing Athens the profits generated by Greek state bonds now held by the ECB and European central banks, a figure totaling 10 billion euros; an early repayment of an IMF loan by Greece via another but lower-interest-rate pegged loan from the ESM, which retains capital left over from a recent bank recapitalization; reducing interest rates on all loans allocated by the ESM, although the margins are already very low and the mechanism cannot guarantee a specific (and low) interest rate for the years to come; establishment of a ceiling for repayment of loan obligations at 2 percent of GDP annually, which at today’s figures is roughly 3.25 billion euros, and, extending a repayment period for the ESM loans, as well as a grace period for interest and capital repayments which expire in 2022.
To date, Greece has received from its Eurozone partners loans worth 52.9 billion euros, from 2010 to 2012. Those loans, after the PSI “haircut”, were extended and are set to mature in the period between 2020 and 2041.
From the newly established EFSF (2012) Greece received loans worth a total of 130.9 billion euros, which mature between 2023 and 2054.
From the ESM, Greece has received loans totaling 21.4 billion euros between July 2015 and Dec. 23, 2015, as part of the third bailout package worth 86 billion euros. These loans will mature over a period commencing next year until the far-off year 2059.
From the IMF Greece has received loans totaling 30.3 billion euros, with nearly half the amount returned given the short-term nature of the Fund’s loaning. The remaining sum matures over a period ending in 2024. The interest rate on the IMF’s loans is 3.8percent. Greece owes the ECB and national banks belonging to EZ member-states 20.4 billion euros.
