Greek Finance Minister Yiannis Stournaras said his goal is to push Greece into a primary surplus this year to earn debt relief. That comes after inspectors from international lenders concluded a review of Greek books that is slated to open the way for 8.8 billion euros ($11.5 billion) in the release of delayed loans.
“For me (the primary surplus) is a national target,” Stournaras told a news conference. It must be achieved “at all costs,” he said. If Greece hits the target, he said that could pave the way for further debt reduction as agreed previously by Eurozone finance ministers.
Greece last year erased nearly a third of its immediate debt, over 100 billion euros ($131 billion) thanks to an unprecedented write-down agreed with private creditors including banks and pension funds but that came at the cost of investors, including those in the Diaspora who had put their savings into helping their homeland, losing 74 percent of their money.
Greece is trying to reduce its debt-to-output ratio ballooning to an estimated 190 percent of Gross Domestic Product in 2014 and 124 percent by the year 2020. Greece’s debt was more than 303 billion euros ($397.5 billion) in 2012 or 156.9 percent of GDP, from 355 billion euros ($465 billion) or 170.3 percent of GDP in 2011, according to the statistics agency ELSTAT.
The International Monetary Fun (IMF) which, along with the European Union and European Central Bank makes up Greece’s Troika of lenders, has been pushing for a so-called “haircut” or write-down of debt by Eurozone partner governments in the way banks wrote off most of the loans due to them earlier this year, but Germany has come out against this ahead of a general election next year.
Stournaras declined to say whether this could be achieved through a so-called ‘official sector involvement’ or OSI that would force the country’s lenders to also take a big hit. ” (The Eurogroup decision) says ‘through appropriate means’ which means all options are open. When the time comes we will discuss them,” he said.
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