Luxembourg, 18/06/2015 (Agence Europe) - On Thursday 18 June, the finance ministers of the eurozone, who are the stakeholders of the European Stability Mechanism (ESM), discussed the ground already given to reduce the Greek debt burden, thanks to the flexibility already provided over the conditions associated with the loans granted to Greece in the framework of its financial bailout plan.
“The European official sector has already given significant support”, said Regling, the director general of the ESM, during the presentation of the annual report of the permanent bailout fund of the eurozone. By extending the terms of the loans, paring down interest rates, etc., the reduction of the debt burden and implicit savings made are currently equivalent to 49% of Greece's 2013 GDP, or 50% of Greece's borrowings from the eurozone.
“The Greek debt is sustainable because of favourable lending rates and maturities from the EFSF and it makes it very easy for Greece to serve its debt”, Regling added. He once again stressed that simply looking at the country's debt to GDP ratio is not enough to get a full picture of the situation. “We need to look at annual flows and they are actually quite low”, he explained, adding that the situation also depended on the continued process of reforms.
In order for the eurozone to keep the promise it made in 2012 to make a further gesture to reduce the Greek debt, the need to act must be agreed upon, stressed the President of the Eurogroup, Jeroen Dijsselbloem, who took pains to stress that the promise was still valid. The Dutch finance minister pointed out that Greece also needs to stick to its commitments under the programme. “That hasn't happened, we need a positive review (by the institutions), we are nowhere near, we cannot even agree on what should be done”, Dijsselbloem said. The Greek government is determined that the issue be put on the table as soon as possible. (Elodie Lamer)