The eurozone's top official expressed optimism Tuesday that Greece's creditors will approve its reform efforts, paving the way for the payout of a new batch of rescue loans that would keep Athens from defaulting on its massive debts this summer. "I hope that there is full agreement between the institutions, that we can move on in the program," said Jeroen Dijsselbloem, the head of the eurogroup of finance ministers, as he arrived for the talks in Brussels.
Greece's parliament passed a bill over the weekend on a series of measures that creditors had demanded. They included tax hikes, more budget-cutting reforms and a new privatization superfund, which will manage almost all state property.
The next step for creditors would be to find a way to lighten the country's debt load, which mainly consists of past rescue loans from eurozone states. Greece's debt is predicted to reach more than 333 billion euros ($379 billion) this year, around 180 percent of its annual economic output. "Greece needs room to breathe, it needs certainty. It's made considerable efforts, and again this weekend," said French Finance Minister Michel Sapin, referring to the reforms Greece passed. On the question of debt relief, Dijsselbloem said there was no appetite for any outright cut to the value of the money Greece owes. Rather, the creditors are likely to examine a possible lowering in the interest rates and possibly an extension of the rescue loans' maturity dates, as called for by the International Monetary Fund. There are fears the IMF may even pull out of the bailout program if Greece's debt burden is not lightened.
"An actual haircut of the loans will not happen," Dijsselboem said. "What we can look at is the annual debt burden, so Greece can on an annual basis pay its debts. If not, we are ready to help them in the coming years." Senior EU officials believe the plans being drawn up by experts to address Greece's short, mid- and longer-term debt needs will be enough to keep the IMF on board. "There is a real added value to have the IMF on board, so it is not an option to go on without the IMF," Dijsselbloem said.
