Brussels, 16/12/2013 (Agence Europe) - In an interview with the Kathimerini newspaper on Sunday 15 December, Greek prime minister Antonis Samaras talked about disagreements among the troika about how to reduce the Greek debt burden, once the size of the primary budget surplus for 2013 has been confirmed (in the spring of 2014).
Samaras said the Greek government was in talks with three different institutions (the European Commission, the European Central Bank and the International Monetary Fund), which all agree to help but have not yet agreed among themselves on how this is to be done. The European Commission refused to comment, but a eurozone source said: “There cannot be a question of the 'troika not agreeing' because this issue will only be discussed in the first half of 2014, not before.”
Last summer showed that the IMF is taking a slightly different approach from Europe. In a monitoring report, the IMF highlighted that too high a debt might act as a disincentive for investors, whereas the eurozone says it is failure to pay back the bailout loans would have the same effect (see EUROPE 10863). Under the 27 November agreement, the target is to reduce the Greek debt to 124% of GDP in 2020, and well below 110% in 2022. To this end, the eurozone is considering simply writing off some of the debt, along with extending the maturity of the loans, cutting interest rates and adjusting the co-financing rates for the European Structural Funds.
In the Kathimerini interview, Samaras said that the decision on a further reduction in the Greek debt (following the PSI in the spring of 2012) must be taken in the spring, as soon as the size of the primary surplus has been announced. A high-ranking EU official said recently that discussions might start in June, but there are fears that things might be left hanging until the new European Commission takes office in November. Samaras ruled out a third bailout (the current programme is financed until September 2015). Greece will need €3.8 billion to cover its financing needs in the final quarter of the year.
Greek media reported on Monday that agreement is close on restructuring the Greek defence system, EAS, needed to ensure the short-term financing of the programme (€1 billion). On Monday morning, however, the European Commission said that there were no developments in this connection. (EL/transl.fl)