“We don’t want the €7 billion. We want to sit down and rethink the whole program,” Greek Finance Minister Yanis Varoufakis told New York Times in an interview right after he assumed his new post. Out task “is to restructure the debt and the economy to get the money we need.”
Varoufakis suggested that the government could finance its obligations by reducing the target for the so-called primary surplus, the amount of cash in Greece’s coffers after expenses and interest payments.
Creditors are demanding that Greece run a primary surplus of 4.5 percent of gross domestic product. Mr. Varoufakis, however, said Athens would propose to hold the level to 1 percent to 1.5 percent of G.D.P.
Greece is also counting on creditors to provide some form of debt relief, which would also free up funds. Much of the rest of Greece’s total debt of €318 billion is in the form of loans from other European Union governments, which do not want write-downs that would cost their taxpayers. Mr. Varoufakis wants to begin discussions with other finance ministers to find ways to reduce that burden and said the government would soon issue proposals.
Even if the new government does not want to abide by the terms of Greece’s bailout agreements, the Treasury would seem in need of a remaining €7 billion loan disbursement from that program if Greece is to pay off foreign debts coming due by August. (Full article NewYorkTimes)
Head of Eurogroup Jeroen Dijsselbloem is due to Athens today, Friday, where he will meet with the new Finance Minister.
Despite the signals by the EU-Troika partners that there could not be debt restructure or renegotiation, SYRIZA-led coalition in Greece insists on this with many ministers claiming that “negotiations have already started.”
PS After two bailouts totaling €240 billion and strictest belt-tightening austerity , Greece’s debt rose to €318 billion. Something must be wrong in the agreements of Troika with “Denmark” of the South…
Of course, even IMF recognized that they made a mistake. Not only Krugman, who was amazingly right all the time. The problem is what to do now – Germany , France etc. rather cannot reduce the debt, because … then they would have a deficit in books (their budget would diminish by the amount they reduced) and they would maybe have to make austerity themselves …
Debt 2009: 301 bio. Now: 320 bio. Increases: 45 bio primary deficits and 50 bio bank recaps. Decrease: 60 bio haircut (only the foreign portion). Don’t hold me to the exact billion but the numbers are very much in the ball park.