Tuesday September 23, 2014 Search
Weather | Athens
33o C
20o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Eurozone holds the key to Greek debt sustainability

 Athens proposes extension and a fixed instead of floating rate

By Sotiris Nikas

The eurozone is responsible for almost three-quarters of the Greek state’s debt, which automatically puts it in control of the country’s obligations and explains the why the Greek government is trying so hard to have the terms of the repayment of loans altered.

Eurostat data released on Thursday showed that after Greece’s entry to the European Stability Mechanism, and particularly after the PSI debt restructuring and the bond buyback program in 2012, the country’s debt was passed on from the private to the official sector, mainly the eurozone and the International Monetary Fund, to avert a Greek default.

Last year 75 percent of the Greek national debt concerned loans issued by the eurozone and the IMF, with the remaining 25 percent in the hands of private investors. As a result, it would be very difficult for Greece to default on its debt.

In this context Athens has chosen to apply light pressure on its eurozone peers for the amendment of its loan terms. Since the bloc will in no way accept any talk of a loan haircut at this stage, the next solution would be to proceed to moves that would appease the markets regarding the management of the debt.

A Greek proposal that the eurozone is examining provides for a new extension to the repayment time for these loans. The core of the proposal foresees the extension of the maturity period from 30 to 50 years, so as to make sure Greece will not have any problems servicing its debts for several years to come.

Furthermore if the eurozone accepts another Greek proposal to turn the floating interest rate into a fixed one for the bilateral loans to Athens from its peers, then the interest payment needs would be significantly reduced. That would banish another risk factor for the Greek state budget in the next few years.

The situation wherein the eurozone holds the bulk of the Greek debt will take years to change, and will necessitate the country’s full access to international money markets.

ekathimerini.com , Thursday Jul 3, 2014 (23:15)  
Troika visit as scheduled, ministry says
Greek yields hit one-month high as Samaras looks to exit bailout
Construction material costs for new residential buildings decrease
German bond gains push 10-Year yield below 1% on stimulus bets
Greece sees early exit from EU/IMF bailout, PM says
Greece can exit its EU/IMF bailout earlier than expected and can cover its own funding needs next year, Prime Minister Antonis Samaras said in Berlin on Tuesday after meeting German Chancell...
Merkel says first signs of success are visible in Greece
German Chancellor Merkel said on Tuesday that the first positive signs of growth were coming out of Greece and the country was heading in the right direction in the implementation of its bai...
Inside News
SOCCER
PAOK joins Olympiakos on top after win at Agrinio
Olympiakos spent just two nights alone on top of the Super League, as on Monday evening PAOK joined the champions on 10 points through its 1-0 victory at Panetolikos. The Thessaloniki giant ...
SOCCER
Reds beat Veria to claim league lead
Olympiakos thumped hitherto Super League leader Veria 3-0 on Saturday to go alone on top of the table for the first time after four rounds of games. Four days after putting three past Atleti...
Inside Sports
COMMENTARY
A painful curse
It was a curse and a painful one at that. It was a brutal act that brings shame on the person who committed it, on the party which he represents, on the Parliament, on Greece and on everythi...
EDITORIAL
Europe’s choice
Tuesday’s meeting between Greek Prime Minister Antonis Samaras and German Chancellor Angela Merkel in Berlin is of crucial importance. It’s hard to deny that Greece has come a long way. The ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greece sees early exit from EU/IMF bailout, PM says
2. Merkel says first signs of success are visible in Greece
3. Troika visit as scheduled, ministry says
4. Greek yields hit one-month high as Samaras looks to exit bailout
5. Boutaris shortlisted for world mayor prize
6. Construction material costs for new residential buildings decrease
more news
Today
This Week
1. Trolley bus, metro services to be disrupted Tuesday, Wednesday
2. Venizelos meets American Jewish officials in New York
3. German bond gains push 10-Year yield below 1% on stimulus bets
4. Supreme Court postpones decision on Finance Ministry cleaning staff
5. Construction material costs for new residential buildings decrease
6. Boutaris shortlisted for world mayor prize
Today
This Week
1. Greece at bottom of social justice scale among EU28
2. ‘Greece can meet its needs on its own’
3. Central Athens traffic restrictions back in force on Monday
4. Record sum of new debts to the state in August
5. Lost in the fog
6. Alexander the Great's tomb not at Amphipolis, says Culture Minister
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.