Reuters circulated a report on Friday afternoon citing what it called a German finance ministry calculation holding that a rescheduling of interest payments on Greek bailout loans until 2048 will translate into a “deferred receipt” of roughly 123 billion euros for Greece’s euro zone creditors – with the biggest being Germany.
The news agency merely said the calculation was included in a letter to a Bundestag member. The German ministry was ostensibly asked to consider various debt restructuring scenarios developed by the European Stability Mechanism (ESM).
The report, nevertheless, come amid this week’s veritable “cascade” of leaks, disclosures, official statements and assessments that more-or-less echo Berlin’s – and particularly FinMin Wolfgang Schaeuble’s – steadfast position against Greek debt relief.
The German side is at loggerheads with the IMF over the Greek program and the need for Greek debt relief, which the Fund demands in order to rejoin the bailout and which Berlin has repeatedly tried to deflect.
The increasingly unpopular leftist-rightist coalition government in Athens is also pressing for medium-term debt relief and is expending whatever little remaining political capital it retains on achieving some sort of agreement.
“With such an interest deferral, it would de facto be a new loan with a volume that depends on the development of interest rates… The estimated volume of the deferred interest up until 2048 would be around 118-123 billion euros,” Reuters reports, in citing what it calls the document.
When queried the German finance ministry declined to comment. No denial, however, was issued.
In a similar report, Bloomberg refers to a document by the finance ministry sent to German MPs, which states that Greek debt sustainability can be restored by a series of medium-term measures to contain the state’s overall financing needs to 20.9 percent of GDP in far-off 2060.
The document, according to Bloomberg, says the calculation was done by the ESM.
The news agency said the ESM scenario is less pessimistic than a recent IMF forecast for Greek economic growth, on an annual basis, and surely less optimistic than the EU Commission’s usually more buoyant estimates.
The ESM’s forecast, Bloomberg stated, is a long-term GDP growth rate of 1.8, on an annual basis, and 1.3 percent in terms of “real GDP”.
