October 28, 2016

EU lenders working on plan for gradual Greek debt relief – Greek paper

Greece’s EU lenders have been working on a plan to offer the country gradual debt relief on condition that it adopts additional reforms by 2022, the Agora weekly newspaper reported on Saturday.

They would initially allow lower interest rates and longer maturities on Greece’s 316-billion-euro  debt, the paper said. At a later stage, there would be talks on linking debt payments to economic growth provided Athens implemented measures to be agreed with creditors by 2022, it added.

The plan has been discussed among officials from the European Commission, the eurozone’s rescue fund, the European Central Bank, and the larger eurozone nations, the paper said.

The lenders have publicly spoken about granting debt relief on condition reforms are completed.

But on Thursday, Jeroen Dijsselbloem, chairman of the eurozone finance ministers group, said they were concerned with the quality of the reforms Greece had promised in return for its bailout, and that the government needed to implement pension reform and other agreed-upon fiscal changes.

Negotiations between the heads of the EU/IMF mission reviewing the country’s progress on a pensions overhaul, fiscal targets and the handling of bad loans, took a break earlier this month.

Greece hopes the lenders will return soon to sign off on the first assessment of its reforms, opening the way for the debt relief talks it is seeking to show austerity-weary Greeks their sacrifices are paying off.

Speaking after an EU summit that on Friday agreed a deal to help keep Britain in the bloc and tackle the region’s migration crisis, Greece’s Prime Minister Alexis Tsipras said all EU partners agreed the review needed to conclude as soon as possible.

In an interview with another Greek newspaper, Economy Minister George Stathakis said the review could be wrapped up by the end of March.

“The target for the Catholic Easter (March 27) is absolutely realistic,” he was quoted as saying in weekly Ependysi. “I believe that there will be a deal.”

In a gambit to get EU countries to refrain from unilaterally imposing restrictions on travel within the free-movement Schengen zone, Greece threatened on Friday not to sign off on the EU’s deal with Britain unless it won assurances that member states would not shut their borders.

The vast majority of migrants fleeing war and poverty in the Middle East and beyond enter the EU by sea through Greece, and Athens is fearful that closing borders will leave thousands stranded inside its borders

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