Brussels, 25/04/2014 (Agence Europe) - Greece's attempt at a technical meeting of the Euro Working Group on Thursday evening (24 April) to get the question of reduction of its public debt discussed ended in failure, with Europe simply noting the Greek request, revealed a source present at the meeting. The disbursement of the next sub-batch of aid to the tune of €6.3 billion was given the go-ahead and will be made by 28 April.
A high-ranking European Commission official explained on Friday that the question had not been discussed by the fourth troika monitoring mission, but would be addressed by the next monitoring mission. He said it would be “premature to reply” to any questions of what form such a debt reduction might take. The Commission's monitoring report, published the same day, revealed a slight improvement in the debt forecasts, which include the measures promised by the eurozone in November 2012 but not yet decided upon in order to reduce the debt burden. The idea is to reduce Greece's debt to 124% of GDP by 2020 and then to substantially below 110% by 2022. Under the revised scenario and despite the measures already envisaged by not yet identified, Greece's debt is expected to fall from 177% in 2014 to around 125% of GDP in 2020 and 112% in 2022. The European Commission is not worried about the deterioration in the debt prospects, pointing out that, after the next monitoring mission, the troika will made new projections and provide data quantifying the impact on the debt of each of the envisaged measures (reduction in interest rates, lower co-financing rates for cash from the EU structural funds or a further extension in the maturity of loans already granted).
In Washington on Thursday, a spokesman for the International Monetary Fund, Gerry Rice, pointed out the eurozone's commitment to help Greece achieve its debt targets for 2020 and 2022 if necessary. On Wednesday, the Commission announced Greece's primary budget surplus for 2013, achievement of which the eurozone has set as a precondition for debt reduction, describing the Greek debt as “sustainable” as long as implementation of the programme continues. Quizzed on this, Rice said: “Our debt assessment remains the same. Public debt is still projected to remain high. And as we've discussed here a number of times before, and as we've just said, Greece''s European partners have agreed to provide debt relief if necessary and contingent with Greece being fully on track with meeting the program commitments. The numbers we've talked about are a debt to GDP ratio declining to 124 percent of GDP by 2020, and to significantly below 110 percent of GDP by 2022. As long as Greece is delivering on its program commitments, again, the Europeans have said they stand ready, as needed, to help Greece hit these targets”.
The €2 billion required to finance the programme by the end of August may come from the purchase by the country's banks of preference shares issued in 2009 to help them recapitalise. This could help raise some €3 billion, according to a high-ranking official. The €5.5 billion needed by the end of May may also be found internally via transfers of unused cash from one ministry to another. (EL)