BUSINESS

Eurogroup chief says Greece, creditors could reach debt relief deal at Tuesday meeting

TAGS: Economy, Diplomacy

Eurogroup president Jeroen Dijsselbloem said on Friday that he believed Greece and its international creditors could reach a debt relief deal a Eurogroup meeting on Tuesday May 25.

Euro zone finance ministers are due to meet Tuesday to discuss Greece's progress on implementing a raft of austerity measures and reforms agreed to as part of the country's third bailout package, worth 86 billion euros, as well as the possibility of relief from its huge debt burden.

"We've made progress in the last couple of weeks looking at different ways to address debt issues now and in the future so I think we can get that deal," Dijsselbloem told CNBC on the sidelines of a G7 meeting in Sendai, Japan.

According to recent reports, the International Monetary Fund (IMF) has called on Greece's creditors to grant the country a temporary period of debt relief. The IMF wants the interest rate on Greece's loans fixed at 1.5 percent and for Athens not to have any debt repayments before 2040, The Wall Street Journal reported recently.

The fund will not consider backing a new bailout program unless it contained debt relief measures, IMF spokesperson Gery Rice told reporters on Thursday.

But many euro zone members are reluctant to offer debt relief, partly because it is politically unpalatable for them domestically and partly because they believe it would reduce Greece's incentive to implement austerity.

Dijsselbloem said those people lobbying for major debt relief up-front have "moderated their stance" and those who have said no relief was needed have also changed their position "a little bit."

"This year or the next, we can reduce the cost of the main loan package for the Greeks," he said. "For the longer term, we have a number of options that we can consider in terms of debt maturity, grace periods... and interest rates. My preference would be to have quite clear choices in what kind of measures that we are prepared to take and then see when they are needed."

 

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