ECONOMY

Juncker warns against talk of another debt haircut

This is not a good time for talking about an overhaul of Athens’s official sector loans – a process known as OSI, or official sector involvement – the prime minister of Luxembourg and former head of the Eurogroup, Jean-Claude Juncker, said in an interview on Tuesday. Additionally, he did not rule out another loan to Athens and noted that the term “Grexit” has now become obsolete.

Juncker told Market News International and the Euro2day website that, according to the Greek streamlining program, the country’s public debt will shrink to 124 percent of gross domestic product in 2020 and decrease further shortly afterward. A further lightening of the debt is not on the table now, he added.

“I am warning against any such discussion or expectation. This is a very sensitive issue and I do not think it is in the interest of Greece or the eurozone to have such a discussion right now,” Juncker stated, dubbing it “irresponsible” if anyone set a date as to when such a discussion should start. Current Eurogroup head Jeroen Dijsselbloem has set a date for next April, which Juncker said this is the earliest possible.

Asked when Greece will be able to return to international money markets, Juncker refused to comment on “assumptions,” but expressed certainty that “Greece will manage to return to the markets in the following period.” He also quipped that while he did not really trust Antonis Samaras before he became prime minister, he now is “my brother.”

Juncker went on to send a message of hope to the Greek people, “because the Greeks have had courage.” He did warn that poverty could bring about social instability, saying that “in the Eurogroup, I have always warned about the risks that still exist for social unrest. I always say that unless the Greeks see a light at the end of the tunnel, it will be a disaster.”