Regling: Greece should not expect big debt write-down, not necessary to revive economy

Klaus Regling, the German managing director of the European Stability Mechanism played down Greece’s expectations for a large-scale debt write down. Speaking to the Financial Times, Regling said among others that Greece was already benefiting from generous loan terms that were the most concessionary “in world history”.

“I think now there’s a big convergence,” Mr Regling said to FT, “The Greek government realises there will be no nominal [debt] haircut — and for good reasons. The Greek government should sell what has happened already — and what might have been — very positively to their electorate, to the Greek population, because the benefits are there in any case.”

I don’t know what Regling means or why does he care about the government electorate. Neither why he claims the Greek government should not have such expectations as Greeks and lenders seemed to agreed in summer that talks on debt write down should commence after the program review and when everybody understands that the debt write-down would be rather in form of “repayment extension.”

In July, the International Monetary Fund had pushed for deeper debt relief with repayment extension and periods of grace. But tt was German Finance Minister Wolfgang Schaeuble who vehemently rejected any of the IMF’s proposals, at least until the 3. bailout agreement was sealed and signed. At that time Schaeuble was in favor of Grexit, despite the fact that the Greek government had agreed on his terms & conditions.

Neither do I understand the FT intro to Regling’s interview reading

“The head of the eurozone’s €500bn bailout fund has played down expectations that Greece will be granted large-scale debt relief, saying it is not necessary to revive the country’s economy and is unlikely to be accepted by European creditors.”

Apparently only Regling knows other ways on how to revive the Greek economy when every single earned cent has to go to the lenders.

Apparently these are things that only the European Anglo-Saxons understand, especially when they have nothing to say but they mean it is time to start putting pressure on Greece again or rather put pressure on the IMF before the debt-relief talks start.

One should read Regling’s whole interview and tell me what’s the deal.

PS I personally “see” the same old dispute and controversy when it will come to debt-relief talks, with the EU conservatives singing the same mantra as in the past and Greece’s “friend” the IMF pushing for more and Greeks trying to make a clue in a clueless world of lenders.