BUSINESS

Schaeuble points to further writedown of Greek debt from 2016

If Greece meets its target of achieving a significant primary surplus by 2016, its eurozone partners will consider a further reduction to its debt, German Finance Minister Wolfgang Schaeuble said following the Eurogroup meeting that ended early on Tuesday.

"When Greece has achieved, or is about to achieve, a primary surplus and fulfilled all of its conditions, we will, if need be, consider further measures for the reduction of the total debt,” he told reporters.

One of the significant aspects of the deal agreed between the eurozone and the International Monetary Fund is that Greece’s partners in the euro area have committed to taking further steps to lower Greece’s debt to «significantly below 110%» in 2022. This suggests that some kind of write-off could be considered once Greece produces a primary budget surplus. It is forecast to have a primary surplus of 4.5 percent of GDP in 2016.

Ahead of Monday’s Eurogroup, Schaeuble had insisted that no writedown of Greek debt could be considered at this stage as Greece was still being granted new loans.

"You cannot guarantee something if you’re cutting debt at the same time,» he said.

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