The
European Stability Mechanism Managing Director, Klaus Regling, said on Thursday
that the time to decide on whether Greece needs additional debt-relief will be
August 2018.
After three
bailouts since 2010, Athens has a 177% debt-to-GDP ratio. The International
Monetary Fund is the only official Greek creditor that insists Greece needs
immediate debt relief to recover. Although the average maturity of the Greek
debt is thirty years, the IMF insists that the Greek debt is not serviceable.
Addressing
a news conference in Cyprus, Regling said that Athens has benefitted from more
debt relief than “any other country in the world.”
Greece
imposed a “voluntary” haircut on its public debt in 2012, which hurt mainly
domestic lenders, savers, and pension funds. However, Greece has also seen a
substantial haircut on interest rates and the restructuring of debt maturities
that have been assumed by its Eurozone partners.
Regling
recalled on Thursday that the reprofiling of Greece’s debt towards the ESM
saves Greece €10bn a year.
The
underlying question is whether Greece will be able to return to international
capital markets in August 2018 to refinance its debt. Regling made clear that
this decision would be made only after the latest bailout programme reached
fruition.
If necessary,
but not before August 2018, Eurozone leaders have committed to further
extension of Greek maturities for up to 15 years.
https://www.neweurope.eu/article/need-greek-debt-relief-assessed-aug-2018-klaus-regling/