Brussels, 10/06/2013 (Agence Europe) - Germany still seems to be keeping a foot on the brake as regards the restructuring of the Greek debt, following the publication of two IMF reports, one on errors in the management of the Greek dossier in the first bailout plan and the other taking stock of the current situation, together with warnings (see EUROPE 10861 and 10862).
On Monday 10 June, the spokesperson of the German Finance Ministry, Martin Kotthaus, said that he saw no reason to believe that the IMF would argue in favour of a write-off of the Greek debt held by public creditors. Having stated, in its report, its view that the first restructuring of the Greek debt last spring had come too late, the IMF highlighted this further over the weekend. According to its chief economist Olivier Blanchard, when the weight of a country's debt becomes “untenable, you have to accept reality and reduce the weight”. He went on to warn that a heavy burden of debt could slow “Greece's return to an acceptable balance”. In its report, the IMF recommends a “front-loaded approach” to the problem. These declarations have offended the sensibilities of the German authorities.
For the time being, the only scenario the Commission has worked on is that of a possible future restructuring of the debt, according to European source, who believes that an operation of this kind would be conditional on the country's budgetary results, which will be available in 2014. This debt reduction should therefore not be the subject of discussions until the middle of that year, the source explained. When asked about the need for a procedure which would give immediate results, such as simply writing off part of the debt, this European source stressed that the agreement reached by the 17 eurozone members in November of last year was part of a long-term strategy of reducing the debt, with the ultimate aim of a debt/GDP ratio of 124% in 2020 and “substantially below 110% in 2022”.
Privatisation. As economic prospects in Greece are still uncertain, the process of privatisation is still slow, with the country yet to receive any offers for the natural gas company DEPA, Reuters reports. “This is something that will have to be assessed” as part of the current mission of the troika to Athens, the source explained. (EL/transl.fl)