Monday , July 24 2017
Home / News / Economy / Eurogroup warns: No debt forgiveness for Greece; Dijsselbloem in Athens

Eurogroup warns: No debt forgiveness for Greece; Dijsselbloem in Athens

The eurozone has ruled out debt forgiveness for Greece and warned Alexis Tsipras that his anti-austerity coalition government must honor all past agreements with international creditors. In a meeting of eurozone finance ministers in Brussels on Monday, a day after left-wing SYRIZA won the parliamentary elections, the euro bosses warned new Greek PM Alexis Tsipras not to have great expectations on debt write-off.

Apparently eurogroup head, Jeroen Dijsselbloem will come personally to Athens and warn the Greek coalition government face to face. The visit will take place on Friday, January 30th, ANT1 TV reported.

Left-wing SYRIZA formed a coalition government with nationalist Independent Greeks. With their common line being “anti-austerity”, Greek coalition government wants to push for a relief of a large part of the debt.

No debt forgiveness for Greece, say eurozone finance bosses

“The eurozone has ruled out debt forgiveness for Greece and warned its new anti-austerity coalition government must honour all past agreements with international creditors and over the limits of concessions available for Greece.

Mr Tsipras will push for relief to cut the costs of servicing a debt worth 177pc of the country’s GDP, and rising.

Jeroen Dijsselbloem, the Dutch finance minister who chairs meetings of the Eurogroup, told the new Greek government not to expect any write down of the nominal or face value of the €316bn (£236bn) debt owed by Greece.

At least 85pc of the Greek debt is owned by the EU, International Monetary Fund and European governments meaning that the cost of any write downs or cancellation would be predominantly borne by taxpayers in eurozone countries hostile to bailouts, such as Germany or Finland.

“On writing down debt on nominal value I don’t think there is support for that,” he said.

Wolfgang Schäuble, the German finance minister, also ruled out any haircut as Berlin officials insisted that Germany’s opposition to debt forgiveness “remains unchanged”.

Alexander Stubb, the Finnish prime minister, said that the eurozone could be willing to discuss extending the maturities on loans to Greece spreading repayment of the full debt over a longer period of time to make it more affordable.

“We will not forgive loans but we are ready to discuss extending the bailout programme or maturities,” he said.

(full article Telegraph.co.uk)

“Enemies” of SYRIZA in and outside Greece estimate that the new coalition government will not be able to survive in power longer than  summer 2015, as its “revolutionary approach” to Troika and the debt will soon enforce it to “cash shortage” and “inability to pay back loans.”

debt loan repayments

   graph via: telegraph.co.uk

The Troika’s last review of the bailout progress program is still due because ex PM Antonis Samaras and the country’s lenders could not agree on the additional austerity measures and budget gap for 2015.  The Troika had a gap of 2.5 billion euro on its speadsheets, while Samaras government was offering austerity measures worth little below 1 billion euro. The negotiations in November 2014 failed and were interrupted until the presidential and parliamentary elections were over and the new government was elected.

 

Check Also

“Unprecedented -Greece is several economic tragedies rolled into one”

Greece’s economy and debt crisis – an underrepresented tragedy watched closely by the economists of …