Eurogroup meets in Luxembourg to discuss Greek debt

Eurogroup President Jeroen Dijsselbloem (R) looks on as ESM Managing Director Klaus Regling answers journalists' questions on Thursday.
Eurogroup President Jeroen Dijsselbloem (R) looks on as ESM Managing Director Klaus Regling answers journalists' questions on Thursday.
Photo: AFP

No final decision will be made on Greece's debt relief during the Eurogroup meetings held in Luxembourg on Thursday, it has been confirmed.

Euro-zone finance ministers (Eurogroup) are meeting to continue talks on the sustainability of Greece's public debt.

Greece will be looking for approval of the next tranche of its loan, totalling €7.4 billion, needed to meet bond repayments next month.

But Eurogroup president, Minister for Finance of The Netherlands Jeroen Dijsselbloem, confirmed no final decision would be made today on Greece's debt relief.

"Today, will give more clarity to Greece and the IMF about how we will move forward," he told reporters in Luxembourg.

"I hope we will take a number of positive steps forward and build on the huge effort Greece has put in."

The third economic programme for Greece began on August 19, 2015, and is scheduled to run until August 20, 2018.

In total, it should provide €86 billion in financial assistance.

The Greek economy stabilised in 2016, and gross domestic product will grow by 1.1 per cent this year and 2.5 per cent in 2018, according to the latest Organisation for Economic Cooperation and Development (OECD) forecast.

"Further progress in combatting tax evasion, broadening the personal income tax base and controlling pension spending are key to cementing the significant fiscal achievements of recent years," the OECD said.

"Public debt has stabilised but remains very high, aggravating economic vulnerabilities and calling for additional debt relief."

Greece is making €9.9 billion in annual budget savings as a result of the reforms that were conditions for getting its bailout money, Klaus Regling, Managing Director of the European Stability Mechanism (ESM) told a news conference in Luxembourg today.

The ESM was set up in 2012 as a permanent solution to Europe's sovereign debt crisis when governments lost access to markets that saw them as too risky, the result of rising deficits, falling competitiveness or poor oversight of banks. Greece, in 2010, was the first to ask for bilateral loans from other euro-zone countries.

Regling said if reforms continue the country could again sell its bonds and not rely on ESM loans as a source of funding.   

"Greece could go back to the market late this year or early next year," Regling said. "It is better to have a gradual move towards the market and with the right credibility with the reforms, that is possible."

Greece generated €3 billion euros from selling five-year bonds in 2014.

(Wort staff)

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