Saturday November 22, 2014 Search
Weather | Athens
18o C
10o 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)  
More cash for banks with same papers
Growth to fuel rise in revenues
Commercial property draws interest from investors
Sony chooses Piraeus as its entry point to Europe
Image of artwork showing humans in blender taken out of schoolbooks
A photograph of a controversial work by a Japanese artist showing people in a blender will be removed from a primary school physics textbook, the Education Ministry said on Friday. The paint...
Simitis supports Venizelos over new movement
Former Prime Minister Costas Simitis on Friday backed PASOK leader Evangelos Venizelos’s proposal to create a new center-left party with the Socialists at its heart. The two men met a day af...
Inside News
INTERVIEW
Tokyo hopes to change the world
The 2020 Summer Olympic and Paralympic Games in Tokyo will serve as a springboard for the rebuilding of Japan’s image and economy following the triple blow of the earthquake, tsunami and nuc...
BASKETBALL
Big win for Greens, tight one for Reds
Panathinaikos scored a crucial as well as emphatic away win at Turow on Thursday that should see it qualify from its tough group to the top 16 of the Euroleague, while Olympiakos saw off vis...
Inside Sports
COMMENTARY
Give Greece a chance
Greece's creditors are testing the country's endurance - again. If they keep pressing, they could split the euro area apart, which would be a disaster for them as much as for Greece. They ne...
COMMENTARY
‘Who lost Greece?’
If, by unhappy chance, Greece’s efforts to create a more efficient economy and more just society should fail, if it turns out that all our sacrifices were in vain, who will be to blame? The ...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Image of artwork showing humans in blender taken out of schoolbooks
2. More cash for banks with same papers
3. Simitis supports Venizelos over new movement
4. Growth to fuel rise in revenues
5. Commercial property draws interest from investors
6. Sony chooses Piraeus as its entry point to Europe
more news
Today
This Week
1. Give Greece a chance
2. Cosco’s Greek unit adds multinational rail-freight client
3. No breakthrough after marathon conference call
4. Israel backs East Med pipeline project
5. Education Ministry mulls over introducing Albanian language classes
6. Greece says EU/IMF lenders disagree with 2015 budget deficit estimate
Today
This Week
1. Double quake on Atalanti fault line rattles Greek capital [Update]
2. Greece and Poland switch roles as young Greeks head to vibrant Eastern European country for better prospects
3. Constructively disrupting the Greek start-up ecosystem: What will the impact be?
4. Anti-junta uprising anniversary to be marked amid tight security
5. Biden heads to Istanbul amid tension over Cyprus EEZ violation
6. Carlsberg takes control of Greek brewer Olympic Brewery [Update]
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.