Greek debt relief deal ‘very close,' EU official says
SENDAIMay 21, 2016 - 12:00 am GMT+3
May 21, 2016 12:00 am
European Economic Affairs Commissioner Pierre Moscovici on Friday said negotiators were "very close" to reaching a debt-relief deal for cash-strapped Greece.
Athens is battling to win debt relief from its European Union creditors, arguing that its burden of loan repayments is too hefty to be sustainable, but Germany has opposed such a move.
Eurogroup head Jeroen Dijsselbloem has said he wants a deal for the debt-wracked country at a meeting of eurozone finance ministers on Tuesday. "We are approaching a crucial moment in these discussions, and I am confident and hopeful that we can reach a positive conclusion because it is simply in everyone's interest to do so," Moscovici told a news briefing at a G7 finance ministers meeting in Japan. "We're very close; very, very close." A senior United States Treasury official at the G7 meeting said it was "certainly encouraging" to see signs of progress in Greek debt talks. "It means there is going to have to be some serious conversations about debt restructuring," added the official, who asked not to be named.
"There is going to have to be serious actions by Greece on the commitments it has made. There is going to have to be an understanding of whether the path is a truly sustainable one." There is general public distaste in Germany, Europe's biggest economy and effective paymaster, for the 86-billion-euro bailout program for Greece. Through a series of painful labor market reforms over the years and tight fiscal policy, Germany has managed to bring its own public finances back into the black, and many think Greece should do likewise. Berlin believes Greece should be granted debt relief only in 2018 after it has fully complied with its EU bailout.
On Thursday, the International Monetary Fund (IMF) said Greece would need a lengthy period free from debt payments to stay afloat if the EU does not agree to cut the debt up front. The government of Greek Prime Minister Alexis Tsipras is eager to win the green light from its creditors to unlock much needed cash from the bailout to avoid defaulting on its huge debt payments this summer.
Greece is on the hook to repay big loans to the European Central Bank (ECB) and IMF in July, and has already fallen behind paying for everyday government duties and public sector wages.