ECONOMY

Debt haircut ‘very dangerous’

It will take some 20 to 30 years for all the positive effects of the reforms to become obvious in the Greek economy, Norbert Barthle, a deputy of the ruling Christian Democrats (CDU) in Germany, stated on Tuesday, noting that structural reforms will need to be «clever».

Barthle added that resorting to a debt haircut would be ‘very dangerous,’ stressing that now things have calmed down, a further writedown of Greek state debt would upset the markets again.

At the same time diplomatic sources in Berlin admitted that discussions regarding a new bailout agreement and a new package of loans for Greece have among their targets the maintenance of the strict monitoring of Greece as far as the application of reforms and the proper fiscal administration are concerned.

They added that the crucial issues for the next two months are the bridging of the financing gap in the Greek program next year and whether there will be a third bailout deal.