I am at the end of my understanding of the world and creditors’ games. The one moment the European Commission whispers to media ears, that it prepares a debt relief for Greece’ debt, the next moment, a financing mechanism from the same Europe, claims the opposite.
“Greece has already received debt relief from its euro zone creditors equal to half of its 2013 GDP in net present value terms, the euro zone bailout fund said in its annual report, noting Greek public debt was now high but sustainable.
The report from the European Stability Mechanism (ESM) said that after various modifications made to the original terms of bailout loans over the last years, Athens had minimal payment obligations until 2023.
Greek debt is at 175 percent of its gross domestic product.
“It cannot be argued that the debt level is unsustainable by merely looking at the aggregate nominal debt to GDP ratio,” the ESM said.
The bailout fund said that Athens received debt relief equal to 49 percent of the country’s 2013 GDP in net present value (NPV) terms.
The NPV approach discounts the difference between the future cash flows of the loans benefiting from lower financing costs and debt relief measures and the cash flows of the same loans had they not benefited from the relief measures.
Greece is borrowing money from the bailout fund at 1.35 percent — a lower rate than many euro zone countries. This is also almost three times cheaper than borrowing from the International Monetary Fund, which charges 3.6 percent.
Before the crisis, Greece was able to borrow on the market at around 5 percent, the ESM said.
The average weighted maturity of the euro zone loans to Greece is 32.5 years and no interest or principal has to be paid back before 2023.” (full story Reuters)
And, of course, there was this PSI of March 2012, but that was apparently a “Bonds swaps only” and no debt relief.
And then, both the EC and the ECB and Bank of Greece refer to “renewal of a previous statement regarding debt relief issued at a Eurogroup meeting in November 2012.”
PS I wouldn’t know there was a Troll Spray…