Brussels, 19/11/2012 (Agence Europe) - Will the extra week of talks recommended by eurozone finance ministers after their 12 November meeting be long enough for the eurozone to agree with the IMF about how to make Greece's debt affordable (see EUROPE 10729)? Dutch Finance Minister Jeroen Dijsselbloem was one of the first to admit that there was little chance of the eurozone reaching agreement at the special Eurogroup meeting on Tuesday. German Finance Minister Wolfgang Schäuble said on Sunday on the ARD television channel: “We have to find a common line and we have to go it on Tuesday”. On Monday, his spokesman thought a further Eurogroup meeting would be needed, even if the ministers reached agreement, in order to settle technical issues.
The European Commission wants the cash needed to pay for the extra two years granted to Greece to be found quickly so the country can meet its budget commitments and get its debt back on track. “The Commission's position is that we need to find an agreement tomorrow”, explained a spokesperson for Euro Commissioner Olli Rehn on Monday.
Greek debt reduction trajectory. On the question of how to make Greece's debt affordable, an EU source said that a combination of various options looked likely, such as reducing interest rates and extending the maturity of loans already granted to Greece.
Germany rules out any writedown in the value of Greek bonds owned by institutional lenders. Commenting on the granting of new aid to Athens, which ECB Executive Council member Jurg Asmussen says is inevitable, this was ruled out by Finnish Prime Minister Jyrki Katainen on YLE Suomi radio station. The IMF is not letting up in its demand that Greece's debt/GDP ratio be reduced to 120% by 2020 rather than 2022 (the latter date is suggested by Eurogroup Chair Jean-Claude Juncker). A European source said people were still open for discussion on this point.
Prior action. At the weekend, the Greek government finalised various details about the structural reforms demanded by their lenders. The Greek media say this includes the granting of new powers to the ministry of finance, including supervision over other ministries. New measures, known as “prior actions”, include the granting of licences for professional colleges and the installation of location devices for fuel tankers. The coalition government will be meeting on Monday evening to put the finishing touches to the reforms required before the next batch of aid is released. (EL/transl.fl)