Brussels, 16/04/2013 (Agence Europe) - The troika said on Monday at the end of the latest fact-finding mission to Athens that the Greek public debt reduction trajectory was still sustainable (see EUROPE 10827). The Greek government wants a new writedown of its bonds as soon as it makes a primary surplus (a surplus not including the cost of servicing the debt). Greek Finance Minister Yannis Stournaras said at a press conference on Tuesday 16 April that the government's main objective was to achieve a primary surplus.
There were two Greek debt writedowns last year, a “PSI” (“private sector involvement”) in the spring and then a bond buyback at a reduced rate in December, which together cut the country's debt by some €127 billion (€107 billion in the PSI and €20 billion in the buyback). The eurozone also agreed to cut the interest rate on its loans and extend the repayment deadlines.
Stournaras did not comment on technicalities, saying that the Eurogroup decision in November talked of a restructuring of the debt using “suitable” measures, which means all options are open and things would be discussed when the time came for talks.
Stournaras said it would be difficult to achieve a primary surplus, but more than three-quarters of the task had been done for public finances and more than three-quarters for competitiveness.
In the sixth year in a row of a shrinking economy, in addition to severe unemployment, Greece is preparing to introduce a further €18 billion of austerity measures from now until 2016. Aware of how difficult this is on the population, the Greek prime minister, Antonis Samaras, said on Monday: “I'm not saying that the difficulties are all behind us, far from it. I am saying, however, that the sacrifices are beginning to take effect. That the situation has started to change”. Poul Thomsen, the IMF representative on the troika, expected the economy to pick up slightly over the next twelve to eighteen months. “Next year will be better”, he said. (EL/transl.fl)