Debt relief could stop if Greece strays from reforms, says Regling

Debt relief could stop if Greece strays from reforms, says Regling

The European Stability Mechanism (ESM) could freeze Greece’s debt relief measures if the government starts rolling back reforms, its head Klaus Regling said in an interview with Austrian newspaper Die Presse, published on Sunday.

“Greece needs to continue the reforms. We are a very patient creditor. But we can stop debt relief measures that have been decided for Greece if the adjustment programs are not continued as agreed,” he said, responding to a question over the possibility of Greece straying from the fiscal path described in its bailouts.

“I am optimistic after my most recent conversations with Prime Minister Tsipras. The debt level appears to be frighteningly elevated. But Greece can live with that as the loan maturities are very long and the interest rates on the loans are much lower than in most other countries,” he added.

Asked whether Europe has learned the right lessons from the economic crisis that started with the collapse of Lehman Brothers, Regling said there is more regulation in place globally today.

“The belief that the market is self-regulating was wrong. In Europe, the five crisis countries have done their homework. As a result of their reforms, four of them are in better shape today than most of the other euro area countries. They are success stories. Hopefully, Greece will also become a success story,” he said. 

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