Tuesday May 26, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Strategy focuses on debt sustainability

 Size of the country’s arrears and a possible haircut are not a priority in the government’s planning

By Sotiris Nikas

Greece’s state debt amounted to 174.1 percent of gross domestic product in the first quarter of 2014 according to data released on Tuesday by Eurostat. Greece has the highest debt as a percentage of GDP in the 28-member European Union and its level highlights the need for an intervention to lighten it further.

However, what increasingly more people are arguing is that the size of the debt is not Greece’s biggest problem. What everyone should focus on now, they say, is how the Greek debt can be made sustainable – i.e. how to ensure that it will be serviced without a problem – and not whether it will undergo another haircut but without the certainty of its repayment.

This is the thinking of the Finance Ministry, which it has systematically promoted over the last year or so. It also mirrors the view of the European Stability Mechanism (ESM), which now holds the lion’s share of Greek debt. ESM head Klaus Regling said during his recent visit to Athens that no one should be concerned about the size of the Greek debt, stressing that what is paramount is the need to ensure its servicing and not a possible need for a new reduction. He added that Europe is not discussing another haircut.

At the end of 2013 – and the same holds true for the first quarter of this year – some 75 percent of Greece’s state debt was in the form of loans from the eurozone and the International Monetary Fund. After the completion of the PSI debt restructuring and the bond buyback program, the share of debt remaining in private hands has dropped to no more than 25 percent. This has brought the risk of a new restructuring close to zero.

In this context there are two main solutions currently being examined in a bid to make the debt sustainable. The first concerns the extension of the maturity period for loans from the eurozone to 50 years, while the second provides for turning the interest rates of the loans of the first bailout agreement in 2010 from floating to fixed, as this would secure Athens a significant reduction in its future expenditure on interest that Greece will have to cover to the countries of the eurozone. The latter, however, appears difficult for the eurozone to accept.

ekathimerini.com , Tuesday Jul 22, 2014 (22:50)  
Euro falls to four-week low as Greece feadlock spurs volatility
IMF´s Blanchard says Greek budget proposals not enough
Time running out for Greece, ESM head Regling says
Here’s a Greek business that’s booming: Making test-tube babies
Ranks of civil service shrink, but not for long
The size of the Greek civil service dipped in the first quarter of the year, continuing the downward trend that started in 2009, but it is expected to grow again, as the government has pledg...
Debt talks resume amid concerns over differences, looming repayment, political upheaval
Government officials on Monday expressed confidence that Greece was close to a deal with creditors that would allow loans to be unlocked but pressure is growing on Prime Minister Alexis Tsip...
Inside News
SOCCER
Berg brace gives Panathinaikos four-point lead
Panathinaikos beat Atromitos on Sunday and took advantage of the goalless draw between PAOK and Asteras Tripolis to open a four-point gap from PAOK at the top of the Super League play-off mi...
SOCCER
Reds add Cup to league trophy with 3-1 win over Xanthi
Olympiakos completed a league-and-cup double on Saturday by beating Xanthi 3-1 in the Greek Cup final at the Olympic Stadium of Athens, that was more balanced than the final score suggests. ...
Inside Sports
COMMENTARY
Greece needs a second election
Most scenarios facing Greece are bleak. The country could default, introduce capital controls, forcibly convert savers’ deposits into bank capital, quit the euro and so forth. But there is s...
COMMENTARY
No more ´quick and dirty´ fixes for Greece
International Monetary Fund Managing Director Christine Lagarde correctly said last week that the protracted negotiations between Greece and its official creditors required «a comprehensive ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Euro falls to four-week low as Greece feadlock spurs volatility
2. IMF´s Blanchard says Greek budget proposals not enough
3. Time running out for Greece, ESM head Regling says
4. Here’s a Greek business that’s booming: Making test-tube babies
5. Overhaul planned for car taxation
6. Third-country tourists posted major increase up to 2014
more news
Today
This Week
1. Overhaul planned for car taxation
2. Here’s a Greek business that’s booming: Making test-tube babies
3. Time running out for Greece, ESM head Regling says
4. IMF's Blanchard says Greek budget proposals not enough
5. Euro falls to four-week low as Greece feadlock spurs volatility
6. No more 'quick and dirty' fixes for Greece
Today
This Week
1. Conspiracy madness
2. National self-awareness put to the test
3. Albanian demarche raises concerns about possible territorial claims over Greece
4. Why Greece won't hold referendum on reforms
5. Greek endgame nears for Tsipras as bank collateral hits buffers
6. Hotel contracts with a ‘Greek default clause’
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.