Eurozone to consider Greek debt relief

Eurozone finance ministers discussed Greece's debt in Brussels after the country fulfilled the eurozone's demands in order to unlock more funding.

Photo by: AP Archive
Photo by: AP Archive

Greek Finance Minister Euclid Tsakalotos and Greek Prime Minister Alexis Tsipras.

Under pressure from the IMF, eurozone finance ministers were on Monday due to consider major debt relief and fresh aid for Greece despite the deep reservations of bailout-weary Germany.

Ministers from the 19-member single currency bloc were expected confront the sensitive topic at talks in Brussels after Greek lawmakers fulfilled the eurozone's latest demands for painful reforms last Thursday.

The vote in parliament, which was met by angry protests, satisfied the conditions of Greece's bailout and opened the way for debt relief as well as fresh loans so that Athens can repay loans of 7.0 billion euros ($7.8 billion) in July. 

"Our country... has fulfilled its obligations totally and on time," Greek Finance Minister Euclid Tsakalotos said on Sunday ahead of the crunch talks, which begin in Brussels at 1300 GMT.

"There is no excuse for further delay on the issue of the debt relief," he said.

Macron in favour of debt relief

Newly elected French President Emmanuel Macron said he backed debt relief for Greece in a phone call with Greek Prime Minister Alexis Tsipras.

Macron told Tsipras he was in favour of "finding a deal soon to alleviate the weight of Greece's debt over time," a statement from the presidenct said.

But Macron's position puts him at odds with Germany where Greek debt relief, following three different bailouts since 2010, is seen as a vote loser ahead of general elections in September.

Greece's debt stands at a towering 180 percent of annual output, the legacy of a crisis that brought panic to the markets and nearly forced the country out of the eurozone.

Germany has led several eurozone governments that have dragged their heels on tackling the debt mountain over the long term, insisting on more reforms before doing Athens further favours.

"Strong willingness"

In opposition to Berlin is the International Monetary Fund, which has made more debt relief a condition of taking part in Greece's third and latest 86-billion-euro ($94-billion) bailout.

"We have to find a scenario on debt that holds for years to come and that everyone can accept, including the IMF," an EU diplomat said on condition of anonymity.

The discussion will be "rather difficult and long," the diplomat said.

Led by tough negotiator and former French finance minister Christine Lagarde, the IMF says Greece's debt is unsustainable and will be "explosive" in the long run, requiring a more ambitious plan from Europe.

This would include dramatically extending grace periods and maturities on the loans far beyond what the eurozone has committed to so far.

The question has served as a point of contention for months between the IMF and the eurozone's most influential official, German Finance Minister Wolfgang Schaeuble.

Opposed to debt relief

Schaeuble opposes debt relief, but at the same time refuses to unlock more loans to Greece without the partnership of the IMF, which he sees as a guarantor of financial rigour.

"I feel a strong willingness by all parties without exception to reach an overall deal," the EU's Economic Affairs Commissioner Pierre Moscovici said in a news briefing.

The meeting will be the first for French Finance Minister Bruno Le Maire, named to his post last week by Macron, a pro-EU centrist.

Le Maire was due to attend the Brussels talks after a morning stop in Berlin where he met Schaeuble to discuss the future of the eurozone. Germany and France are Greece's biggest lenders.

Tsipras earlier this month grudgingly accepted the need to legislate more spending cuts to unlock the cash and win debt relief.

The vote was greeted by a heated protest of 10,000 people outside parliament, with many Greeks fed up with yet another round of austerity to meet the demands of the country's eurozone partners.

Source: 
TRTWorld and agencies