Friday March 6, 2015 Search
Weather | Athens
20o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Eurogroup fails to reach agreement on Greek debt after lengthy talks

After almost 12 hours of talks, stretching into Wednesday morning, eurozone finance ministers were unable to agree with International Monetary Fund managing director Christine Lagarde on a formula to reduce Greek debt and agreed to meet again on Monday to try to resolve the issue.

In a statement issued on Wednesday morning, the Eurogroup acknowledged the steps taken by Greece to meet its program targets but said it would have to debate further what action to take next.

The Eurogroup noted with satisfaction that all prior actions required ahead of this meeting

have been met in a satisfactory manner, the ministers said in their statement. This reflects a wide ranging set of reforms, as well as the budget for 2013 and an ambitious medium term fiscal strategy for 2013-16. These efforts demonstrate the authorities' strong commitment to the adjustment program.

Against this background, the Eurogroup has had an extensive discussion and made progress in identifying a consistent package of credible initiatives aimed at making a further substantial contribution to the sustainability of Greek government debt. The Eurogroup interrupted its meeting to allow for further technical work on some elements of this package. The Eurogroup will reconvene on Monday, 26 November.

The delay in reaching a conclusion means that Greece is to be kept waiting for news on the disbursal of up to 44 billion euros in bailout instalments, some of which it was hoping to receive at the beginning of next month as the government is running out of cash to cover its basic needs.

Despite reports of the eurozone failing to bridge its differences with the IMF over how to make Greek debt sustainable and rumors of splits among finance minister, Eurogroup chief Jean-Claude Juncker insisted there were no irreparable differences.

"We are close to an agreement but technical verifications have to be undertaken, financial calculations have to be made and it's really for technical reasons that at this hour of the day it was not possible to do it in a proper way and so we are interrupting the meeting and reconvening next Monday, Juncker told reporters.

"There are no major political disagreements, he said.

A document prepared for the meeting and seen by Reuters declared that Greece's debt cannot be cut to 120 percent of GDP by 2020, the level deemed sustainable by the IMF, unless euro zone member states write off a portion of their loans to Greece.

The 15-page document, circulated among ministers, set out in black-and-white how far off-track Greece is in reducing its debt to the IMF-imposed target, from a level of around 170 percent of GDP now.

The document set out various ways Greece's debt could be reduced between now and 2020, but concluded they would not be enough without euro zone creditors taking a hit on their own holdings -- something Germany and others have said would be illegal.

The document did say Greek debt could fall to 120 percent of GDP two years later -- in 2022 -- without having to impose any losses on euro zone member states or forcing through a buy-back of Greek debt from private-sector bondholders.

Without any corrective measures the document said Greek debt would be 144 percent in 2020 and 133 percent in 2022, figures first reported exclusively by Reuters last week.

"To bring the debt ratio down further, one needs to take recourse to measures that would entail capital losses or budgetary implications for euro area member states, the document says.

"Capital losses do not appear to be politically feasible and would jeopardize, at least in a number of member states, the political and public support for providing financial assistance."

Among the main measures under consideration to bring Greece's debt burden down as rapidly as possible is a debt buy-back under which Greece would offer to purchase bonds from private investors at a discount to their nominal value.

Several options are under consideration, officials have said and the document makes clear, including using about 10 billion euros to buy back bonds at between 30 and 35 cents in the euro.

There are also proposals to reduce the interest rate on loans already extended by euro zone countries to Greece, to impose a moratorium on interest payments and lengthen the maturities on loans, all of which would cut the debt burden.

[Kathimerini English Edition & Reuters]

ekathimerini.com , Wednesday November 21, 2012 (07:16)  
Kasidiaris cleared over live TV attack on Communist MP
Internal inquiry indicates missing student was bullied
Ex-Greek PM takes legal action against HSBC list tipster
Pipeline to carry water to Aegina gets go-ahead
Cyprus to return to growth in 2015
Bailed-out Cyprus will return to growth in 2015 following a three-year recession, a survey showed, after the island won praise from European Central Bank chief Mario Draghi (photo) on Thursd...
Fitch report: Grexit unlikely to trigger systemic crisis
Fitch Ratings said in a report on Friday that the eurozone would suffer a significant shock if Greece left, but it would be unlikely to trigger a systemic crisis like that in 2012, or anothe...
Inside Business
BASKETBALL
Barcelona beats Panathinaikos once more
For the fourth time this season Panathinaikos failed to beat Barcelona, this time in Athens, losing 81-77 on Thursday and denting its chances for a privileged top-two finish in its Euroleagu...
SOCCER
Iraklis, Apollon and Xanthi in Cup semis
The prospect of a second-division team reaching the Greek Cup final has grown considerably after two out of the three teams that made the semifinals this week come from the Football League. ...
Inside Sports
COMMENTARY
PISA, Schengen, mediocrity and isolation
Greeces most serious problem is not the economic and political crisis, though it did contribute greatly to it. At the root of our evil lies our great isolation, not only from our partners i...
EDITORIAL
New blood, fresh ideas
New Democracy needs new blood and fresh ideas. Former Prime Minister and conservative chief Antonis Samaras should be credited with keeping Greece on its feet and he is one of the very few p...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Kasidiaris cleared over live TV attack on Communist MP
2. Internal inquiry indicates missing student was bullied
3. Ex-Greek PM takes legal action against HSBC list tipster
4. Pipeline to carry water to Aegina gets go-ahead
5. Greek police arrest Conspiracy members brother
6. German Hellenic Business Association offers to pay for PISA
more news
Today
This Week
1. BoG chief Stournaras briefs PM Tsipras on ECB's decisions on Greece [Update]
2. Cash-strapped Greece repays first part of IMF loan due in March
3. Greek and German bruisers limber up for 'rumble in the eurozone'
4. Greece must repay loans in full, bailout fund head says
5. Greek reforms list cites tackling evasion, fiscal savings, source says
6. Greece sends new letter with details on reforms, sources in Brussels say
Today
This Week
1. Greece to make international protest over Turkey reserving Aegean air space
2. The Greek tax drama
3. SYRIZA feeling the pain
4. Varoufakis to make six reform proposals at Monday's Eurogroup
5. The unlikely winners of Greece's surrender on euro
6. Tsipras reversal draws Greek sympathy as party rumblings rise
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2015, H KAΘHMEPINH All Rights Reserved.