Rehn says no decision on Greek debt relief until summer

Greece will have to wait until next summer to find out whether it will be granted further debt relief by its eurozone partners and must be prepared for close monitoring of its public finances for many years to come, European Economic and Monetary Affairs Commissioner Olli Rehn has revealed.

Responding to a question from SYRIZA MP Nadia Valavani during a conference in Lithuania, Rehn confirmed the speculation that there would be no discussion on how to reduce Greece’s debt burden any further before the European Parliament elections in May.

Rehn also underlined that Greece’s fiscal monitoring would not end when its bailout expires, regardless of whether that is next summer or if a third package is needed.

As Kathimerini has reported in the past, since May 30 all eurozone members are bound by tighter fiscal regulations, which are known as the “Two Pack.” The legislation obliges governments to publish their midterm fiscal plans and budgets in good time but also means that countries that are under an adjustment program will be subject to “very tight enhanced surveillance by the Commission and by the European Central Bank.” The rules also mean that this monitoring will remain in place until a country has paid 75 percent of the loans it has received.

In Greece’s case, this means that the surveillance will be in place for at least another 25 years. Athens has so far received 133.04 billion euros from the European Financial Stability Facility (EFSF). The average maturity of the loans is 30.48 years but this could be extended next summer. The EFSF is due to pay out another 10.66 billion euros.

Greece has also received 52.9 billion euros in bilateral loans from its eurozone partners. This will also have to be paid back as part of the process of exiting fiscal surveillance.